What is the future of global manufacturing in Poland? Although economists are skeptical of how the US political climate may affect future growth they remain cautiously optimistic. With its bounce back from communism in the 90’s and recent developments, Manufacturing in Poland is defying the odds.
Currently, Poland holds an active stance in the electronics market, producing about 35% of all televisions sold throughout Europe. The number of exports continues to grow year-after-year. Growth that is not expected to halt anytime soon. According to the Global Economic Prospects report, economic growth in Poland will increase by 3.1%, up to half a percent higher than last year.
Fall of Communism
Poland found itself in an awkward position after the fall of communism. Although they had an abundant amount of natural resources and an excellent infrastructure for produce consumer goods, they lacked the strong commercialism necessary to launch a healthy manufacturing industry. Without capital investment, jump starting the economy proved difficult. At first, officials relied on Internal Monetary funds to restart the economy, but the process proved slow. What Poland needed was to attract foreign investment.
The creation of the Polish Special Economic Zones in 1994 generated the substantial incentive for start manufacturing in Poland. It created corporate preferential conditions and tax exemption for corporations to operate in certain regions. Polish Special Economic Zones now attracts many foreign investors, and have incubated high-profit margins for the companies operating within them. They have also revitalized communities that would otherwise still be struggling to regain economic stability after the fall of communism by providing jobs for Poland’s massive large unskilled labor force.
Polish leaders furthered the progress of capital investment by providing exceptional opportunities to new start-ups. The Act on Freedom of Economic Activity passed on July 2nd, 2011, which simplifies procedures for establishing new companies in Poland by reducing start-up fees and waiting periods. Combined with the Polish Special Economic Zones and the proximity of Poland to Europe and Russia, the new laws make Poland very attractive for investors looking to start new manufacturing companies. A flood of investors is expected to infiltrate Poland over the next few years as other international policies threaten the Special Economic Zone.
Poland’s recent PMI saw an increase against economists’ predictions. Polish Manufacturing saw a resurgence in February of 2016 and has continued to rise. Economists mainly attribute this growth to increased exports and dropping unemployment rates. Poland’s wages average less than half that of Germany’s in comparable jobs. Although it is hard on the workers, it makes of affordable integration in European investment. Many manufacturing start-ups have taken advantage of these wages as an opportunity to increase profit margins. As a result, unemployment rates have plummeted, and the overall economy is flourishing.
Although Poland struggled to transition from communism to a western, privatized economy in the 1990s, Poland today is fighting to compete in the global market of manufacturing. With a rapidly growing economy and recent legislation to promote economic growth, Poland is becoming a manufacturing powerhouse of Europe.
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