Cement factory, Rejowiec, Poland (Cement Ożarów, Public domain)
Most sectors and industries have improved their financial performance. The leaders of profitability are manufacturers of cement, lime and gypsum. The released results summarize last year’s results of companies, taking into account not only material achievements but also financial effectiveness. The latter is worth noting, as it indicates the direction in which the Polish economy is developing.
Among the most important facts, one should count the increase in sold industrial output of 3.2 per cent in 2016, keeping in mind though that it was more subdued than a year earlier, when it amounted to 6.0 per cent over the previous year. The increase in production was observed in manufacturing (4.1 per cent) and in water supply, sewage and waste management and remediation (3.0 per cent). The production in mining and extraction decreased (by 5.2 per cent). Similarly to the previous year, production, supply and distribution of electricity, gas, steam and hot water also decreased.
In 2016, an increase in sold production was recorded in most of industry sectors (24 out of 34) and given its total value – in 80 per cent of industry. Textile production increased the most – by 16.3 per cent, and furniture production by 12.1 per cent. Declines in production were mainly due to the production of coal and lignite (-5.4 per cent).
There is a correlation between the recorded increases in production and the level of employment. Expanding textile and furniture manufacturers have clearly increased employment; the manufacturers of textiles by 8 per cent and furniture – by 6.4 per cent.
The interdependence of production also occurs at the opposite pole – employment in the coal and lignite mining industry is declining: in 2016 it decreased by 9.7 per cent. In the whole manufacturing industry employment rose by 3.2 per cent last year.
Evidence that a good economic relationship is being maintained between the size of production and employment is provided by the, admittedly modest, rise in labor productivity in 2016. Last year labor productivity in industry rose by 0.9 per cent, while employment increased by 2.2 per cent and average monthly gross wages by 3.2 percent.
The highest increase in labor productivity (of 2.3 per cent) was recorded in mining and output. Among sectors, productivity growth is particularly noticeable in leather products (8.0 per cent), textiles (7.7 per cent) and clothing (7.2 per cent).
Efficiency indicators help identify the areas of particularly good development. Among the many used by GUS it is worth keeping track of the gross turnover profitability. It points to sectors with good prospects for development from investors’ point of view.
In 2016, the gross turnover profitability rate increased from 4.8 to 6.3 per cent on average. In 2016, the highest figure (17 per cent) was recorded in cement, lime and gypsum production. A gross turnover profitability in excess of 10 per cent was also reached by manufacturers of soap, detergents and cosmetic products, paper and cardboard, plastics, as well as toys.
These results are certainly pleasing to the manufacturers of the identified industries, but – indirectly – they also give a bit of thought when assessing the level of competition in these areas.
It is worth noting that much lower profitability levels are achieved by manufacturers in industries that are emerging as carriers of progress across the whole economy. For example, entrepreneurs included in the category of manufacturers of a wide range of measurement equipment recorded a drop in gross turnover profitability from 9.1 to 6.6 per cent in 2016, telecommunications equipment – down from 6.8 to 5.8 per cent, computers and peripheral devices – from 5.8 to 5.7 per cent. Also, the manufacture of consumer electronics is in stagnation, with gross turnover profitability at the low level of 1.4 per cent.
Losses and negative profitability are persistently recorded in the coal and lignite mining industry, although the sharp improvement of results in 2016 is worth mentioning. Surprisingly, when it comes to profitability, the worst results were obtained by the manufacturers of arms and ammunition (-2.4 per cent).