Polish prosperity index drops again in March, reflecting slower wage growth and job losses

March 2025 brought another dip in economic sentiment, as the Prosperity Index declined by 0.2 points compared to the previous month. The latest drop continues a concerning trend, reflecting a more difficult environment for both employees and employers.

The decrease in the index was primarily driven by two factors: a slowdown in wage growth within the enterprise sector and a continued decline in the number of companies employing workers in this category. Inflation, meanwhile, remained stable in February following a revision of commodity group weightings in the consumer price index. As a result, inflation had a neutral effect on the overall index.

Real wage growth slowed to an annual rate of 4.9 percent, now matching the current rate of inflation. This marks a significant decline from a year earlier, when wage growth was nearly double that figure. The deceleration is partly due to a smaller increase in the minimum wage compared to last year, which has reduced upward pressure on salaries in lower-income brackets. Additionally, weaker sales results in the manufacturing sector have limited companies’ ability to offer wage increases.

Employment in companies with more than ten employees has also continued to shrink. Over the past two years, the sector has lost nearly 75,000 full-time jobs, with the downward trend persisting since February 2023. Experts suggest that this decline is unlikely to reverse until the broader economy shows signs of recovery and business investment begins to rise again.

As companies grapple with uncertain market conditions and cautious spending, both job creation and wage growth remain under pressure. The outlook for the coming months will depend heavily on economic signals and whether business confidence begins to recover.

Source: BIEC