Wage growth in Poland slowed, employment continues to decline

Wage growth in large and medium-sized Polish companies slowed noticeably in August, while employment continued to shrink. New data from the Polish statistical office GUS reinforce signs of gradual cooling in the labor market.

The average gross monthly wage in the enterprise sector in August was PLN 9,259.54. That is 5.6% more than a year earlier, but significantly lower than July's growth rate of 6.8%. Analysts had expected wages to increase by about 6.6% year-on-year.

Compared to July, the average wage fell by 2.6% - from PLN 9,509.02. GUS explains this, among other things, by lower additional payments to employees: bonuses, quarterly and annual awards, jubilee payments, and retirement severance pay.

At the same time, employment in the enterprise sector continued to decline. In August it amounted to about 6.368 million full-time equivalents - 0.8% less than last year and 0.2% less than in July. The year-on-year decline was in line with economists' expectations.

This refers to statistics for enterprises employing more than nine people, so the figure is not the average wage of all workers in Poland.

Despite the slowdown, nominal wages still grew faster than consumer prices. Inflation in Poland in August was 3.4% year-on-year, against wage growth of 5.6%, so the real purchasing power of wages continued to increase, although the pace of that growth weakened.

The current dynamics continue the trend of easing wage pressure. In May wages in the enterprise sector grew by 5.8% year-on-year, in June by 5.9%, and the July jump to 6.8% proved temporary. The Polish Economic Institute previously noted that wage growth is already significantly lower than in previous years, although personnel costs remain one of the main problems for business.

The employment situation also remains weak. In June the number of employees in the enterprise sector was 0.9% lower than a year earlier, and in July and August the decline was 0.8%. This indicates that companies are not yet moving to expand staff even despite the growth of the Polish economy.

Based on: Rzeczpospolita, GUS