|Polish firms are reacting to the economic slowdown by cutting work hours|
Polish firms are adjusting to survive in a tougher economy by cutting work hours and putting hiring on hold.
“In Q2, business owners cut work hours, on average, by an hour a week compared to the previous quarters,” Maria Drozdowicz-Bieś from the Office of Investment and Economic Cycles was quoted by Rzeczpospolita as saying.
These are some of the first moves made by firms in times of a slowdown, which – according to macroeconomic indicators and economists – is beginning to hit. The indicators leave no doubt that the euro zone fell into recession in Q3 and this affected Polish industry as well.
Its condition is now the worst it has been since July 2009, with manufacturing PMI dropping more than expected in September to 47 points from 48.3 in August. For the sixth month in a row the index has now shown a contraction of the sector.
Manufacturing output has also been declining steadily since May. Unemployment is likewise on the rise.
The unemployment rate in August, adjusted for seasonal factors, was at 12.8 percent. Ms Drozdowicz-Bieś said businesses are deciding to cut working hours because it is less costly and safer than firing employees.
“Small businesses are the most concerned about the slowdown. Small firms are also the ones which are more likely to cut salaries before they reduce jobs,” added Dariusz Gobi, director of the Pomeranian Chamber of Crafts (Pomorska Izba Rzemie∂lnicza), which represents small and medium-sized firms.
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