Microbusiness says: pass
InfoCredit Business Activity Index
In 2023, 372.5 thousand businesses were suspended. This is definitely more than in 2022, which was already a record low.
Last year, as many as 198.2 thousand businesses were closed – the most since 2014.
The InfoCredit Business Activity Index fell to its lowest point on a quarterly basis since we started counting it (January 2018).
In total, there were almost 571 thousand suspended and closed businesses in 2023, and 479.5 thousand new and resumed businesses.
Exactly what we expected happened. And we are not proud of it. In October, we wrote that if Polish micro-entrepreneurs were to suspend their businesses at the same pace as they had been doing up until September, the record would be broken. And it would be broken by a lot. And it was broken.
In 2023, 372.5 thousand businesses were suspended. A year earlier, 347.4 thousand. The fact that 198.2 thousand businesses were closed is also very worrying. This is the worst result since 2014. The advantage of suspended and closed businesses over new and reopened businesses has increased even more. The result – the InfoCredit index, calculated quarterly, is the lowest in history.
What’s going on? Nothing new. The cost of running a business on your own has been constantly growing for over 2 years. Because that’s how long we’ve been dealing with high inflation. Let’s recall – we had this problem in Poland long before the outbreak of the war in Ukraine. In January 2022, inflation was 9.2 percent y/y (minimum wage in 2022 was PLN 3,010 gross, hourly rate 19.70). And then it only got more expensive.
Price increases mean higher business costs, greater employee pressure for pay rises (which is hardly surprising given the record low unemployment rate), an increase in the minimum wage and other wages. And consequently, an increase in ZUS contributions and burdens on businesses. In the meantime, entrepreneurs (and not only them) received a gift in the form of the Polish Deal (we deliberately write with a small one), i.e. an additional burden in the form of a non-deductible health insurance contribution. The disturbing trend of an increase in suspended and closed businesses began in mid-2021, right after the announcement of the assumptions of the Polish Deal. And it accelerated significantly after the Polish Deal was implemented.
What now? We don’t have good news. Entrepreneurs welcomed the new year, and with it, more burdens. The ZUS contribution is now PLN 1,600.27 compared to PLN 1,418.48 in 2023. Can’t you do it alone? Do you employ? The minimum wage is already PLN 4,242 gross, and it was PLN 3,600 in 2023 in the second half of the year. The hourly rate is increasing from PLN 23.5 to PLN 27.7. Reliefs? For now, it’s vague. The tax-free amount of PLN 60,000 is not possible for now. ZUS vacation for a month? The bill is there, it is to be submitted to the Sejm by March.
A lot can still happen in business until March. For now, one thing is certain – sole proprietorship is becoming less and less attractive compared to… full-time employment. Given the situation on the labor market.
InfoCredit Business Activity Index
Our business activity index shows the ratio of new and resumed business activities to closed and suspended ones. When the index is positive, it means that more businesses were established and suspended than were suspended and closed. The higher the index value, the greater the propensity to open small businesses. When the index indicates values below zero, it means a retreat from this form of economic activity. The more the index is negative, the more small entrepreneurs withdraw from business (definitely or temporarily). We publish the index on a quarterly basis (after each quarter) and monthly basis.
