Services are a sector of increasing importance in the Polish economy but in July and August growth in retail sales, wholesales sales and transport was slower than in previous months.

In August 2008 retail sales in constant prices by companies employing more than nine people were higher by 3.9% than in August 2007; in July 2008 the increase was 10.1%. In the year to August retail sales were higher by 11.7% year on year. All groups of retailers recorded increases in sales in the year to August except for those selling foodstuffs, beverages and tobacco products – these retailers recorded a 1% drop in sales. The highest growth in sales (40.1%) was noted by retailers selling clothes and footwear. Retailers selling furniture, radio and television equipment and household appliances recorded an increase of 31.2%. Other groups recording high sales were retailers selling press and books (24.1%), pharmaceuticals, cosmetics and orthopaedic equipment (17.6%), motor vehicles, motorcycles and parts (12.2%) and solid, liquid and gaseous fuels (6.1%)
In August 2008 wholesale sales (in current prices) by companies employing more than nine people increased by 0.3% compared to August 2007; in July the increase was 10.7%.
Transport companies employing more than nine people recorded an increase in sales in constant prices of 5.8% in August and 3.8% in the year to August. As in previous months, road transport grew but rail, pipeline, sea and inland water transport decreased.

In September 2008 the general climate in the retail sector was less optimistic than in August and September 2007 due to less favourable predictions for sales and retailers’ financial situation. The level of inventories was still considered to be excessive. As a result, orders for goods will be smaller. Retailers expected a smaller rise in prices in the next three months than previously predicted.

In September 23% of the surveyed retailers signalled an improvement and 15% a deterioration in business conditions. Some 5.1% of the surveyed retailers repoted no barriers to their current business operations. The remainder signalled the following major barriers: market competition (signalled by 71% of the surveyed retailers), high labour costs (64%) and high fiscal burdens (55%). Compared to September last year, only slight changes were recorded in individual barriers. In most cases, retailers chose the following sources to finance their working capital: own resources (69%), bank loans (27%) and open account (25%).
Business climate assessments differed from branch to branch. Retailers selling furniture, radio and television equipment and household appliances were the most optimistic in September. Sales of motor vehicles dropped. Retailers selling food also reported a drop in sales and excessively high inventories.
As in earlier months, the outlook on business conditions was very positive in the financial services sector, with 54% of the surveyed companies reporting an improvement and 1% reporting a deterioration in business conditions. Demand for financial services was at the previous month’s level, the outlook for sales and financial situation was positive, employment and prices of services were expected to increase. In September 6.9% of the surveyed companies reported no barriers to their operations. Competition from Polish and foreign companies was indicated as the most important barrier respectively by 79% and 55% of the surveyed companies.
In the transport, warehousing and communications sector, 27% of the surveyed businesses signalled an improvement and 11% a deterioration in business conditions. Managers signalled a rise in current and future demand and sales, an improvement in their companies’ financial situation, and a slight increase in employment. In September, 3.9% of the surveyed companies reported no barriers to their business operations against 6.1% in August. Competition from Polish companies and labour costs are the most serious barriers – indicated respectively by 58% and 54% of the surveyed companies.
As in August, companies in the real estate, rental, education and business services sector were optimistic in September. They expected a rise in employment and the outlook for their financial situation was favourable. 22% of the surveyed businesses signalled an improvement and 7% a deterioration in business conditions. 12.8% reported no barriers to their operations. The largest percentage of companies, 53%, pointed to labour costs as the most serious barrier.
The outlook in the hotel and restaurant sector was slightly worse than in August. 21% of the surveyed businesses signalled an improvement and 14% a deterioration in business conditions. Managers indicated a slower increase in demand and sales and expected their companies’ financial situation to deteriorate. Only 3.4% of the surveyed companies reported no barriers to their business activity. The most serious barriers were labour costs (indicated by 68% of the companies), competition from Polish companies (57%) and fiscal burdens (51%). Compared to September 2007, the barriers created by competition and fiscal burdens increased the most.