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The Warsaw Voice » Business » May 27, 2011
Business & Economy
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Poland Most Attractive to German Investors
May 27, 2011   
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German businesses favor Poland over other CEE countries, a new survey has found.

An overwhelming 86 percent of German businesses that have invested in Poland would do so again, while only 5 percent would go elsewhere, according to a recent poll by the Polish-German Chamber of Industry and Trade AHK Polska. That compares favorably with 2010, when the number of survey respondents who were unsatisfied with their Polish ventures was twice as high.

With a total score of 4.8 points on a 6-point “investability” scale, Poland outpaced its biggest regional rival, Slovakia, which scored 4.1 points. The Czech Republic was in third place.

The Baltic states are the other winners in this year’s survey as they moved up sharply in the rankings compared with last year. Estonia and Latvia moved up six places, scoring 4.0 points and 3.8 points respectively, while Lithuania moved up three places, scoring 3.8 points. Hungary and Romania lost in investment attractiveness, moving down three and five places respectively and scoring 3.7 points and 3.2 points. Compared with the 2010 survey, Germany also ranked high, scoring 4.4 points, ahead of Poland’s southern neighbors Slovakia and the Czech Republic.

Half of the nearly 80 businesses surveyed—19 percent more than last year—termed Poland’s economic situation as good and almost 48 percent as satisfactory. Their projections for the future are also optimistic. Over 90 percent of those surveyed believe that the economic conditions will improve or at least stabilize at the same favorable level. Projections for business operations are also favorable, with 70 percent of those surveyed planning a rise in their sales in 2011, and almost 45 percent expecting an increase in exports and nearly 43 percent expecting an increase in exports to Germany. Only 6 percent of those surveyed believe sales will decline and only 1.5 percent project a drop in exports. A solid 36 percent plan a rise in the number of their employees while almost 39 percent plan to raise their investment spending.

The upward trend in German investment is confirmed by data provided by the Polish Information and Foreign Investment Agency (PAIiIZ). The agency now handles 13 German investment projects worth a total of 363 million euros compared with six German projects handled in the second quarter of 2010.

As regards individual investment location factors, the highest increase, compared with last year’s survey, was noted in terms of Poland’s political stability; the country scored 3.6 points on a five-point scale, moving from ninth to second place. Poland scored slightly more points for its membership of the European Union while the subsequent places went as usual to labor qualifications (3.5 points), motivation of workers (3.5 points), labor productivity (3.5 points), labor availability (3.5 points) and the quality of suppliers (3.4 points).

Infrastructure and public administration efficiency were the two investment location determinants which traditionally received the lowest scores of respectively 2.5 points and 2.7 points.

The respondents listed their priorities with regard to Poland’s economic policy as development and modernization of infrastructure, improving the quality of public administration, the reform of public finances and adoption of the euro as the national currency.

Data provided by PAIiIZ indicates that Germany is still Poland’s main trade partner and one of the main foreign investors in Poland. In 2009, Germany ranked first in terms of the value of foreign direct investment (FDI) in Poland. German investments that year were valued at 2.14 billion euros, which accounted for 21.7 percent of the total amount of FDI and 23.9 percent of European direct investment in Poland. Germany ranked ahead of France, with 1.38 billion euros, and Luxembourg, with 1.25 billion euros. The cumulative value of German investment in Poland is estimated at over 20.8 billion euros. At the end of 2009, there were 5,848 German-owned businesses operating in Poland.
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