Business during the war

The outbreak of war in Ukraine, which started near the country's borders under the cover of Russian-Belarusian military exercises, resulted in a certain outflow of workers from Ukraine already at the turn of the year. After they had left for home for Christmas, they very often could not return to Poland due to the decisions of the Ukrainian administration. This concerned practically only men, who constituted (and still constitute) a very significant group of employees in many sectors including construction which was the first sector to start pointing out problems resulting from the outflow of Ukrainian workers. Of course, the problem was felt in many more industries, especially in places where lower-skilled workers are employed.

Currently, refugees from Ukraine are mainly women with children who mostly declare their willingness to take up work as soon as possible, but for obvious reasons (e.g. lack or poor knowledge of the Polish language or the impossibility of leaving a child in someone's care or in a nursery or kindergarten) these may be simpler jobs that at the same time enable them to take care of their children.?

Certainly, the arrival of such people can be a positive signal for many industries that have so far struggled with the lack of workers. I mean here, for example, service industries, HoReCa and retail trade, including super and hypermarkets.?

In industries, which require slightly different, higher qualifications - the profile of an employee, the influx of refugees will probably not have a significant, direct impact on the availability of workers, especially in the short term. The higher the qualifications required in an industry, the lower the availability of labor, and wage pressures will increase.?

The plastics processing industry, which I represent, is a fairly broad and highly diversified one. Depending on the profile of the company (type of production), it requires different qualifications from employees, but for the most part those who are better qualified. Therefore, the industry is likely to continue to experience wage pressure. Eurocast, like many other companies in the region, has joined the nationwide initiative to help refugees from Ukraine, offering - in addition to material support - assistance in the form of job offers (of course, on terms that are the same as those offered to local workers.

I assess the impact of an increased number of workers from Ukraine on the Polish economy as positive, especially in the perspective of the next two quarters of 2022. Many entrepreneurs will be able to "patch up" staff shortages and optimize operational activities, thereby increasing production and revenues.

However, it is difficult to estimate the macroeconomic situation and the impact of war and inflation on Poles' wallets, and thus on internal demand. This will determine the extent to which Polish companies will use their production capacity, and thus the demand for workers.?

If we were to talk about a possible dumping of labor rates, in my opinion it will not be directly caused by an excess supply of labor, resulting from the entry into the market of hundreds of thousands of workers from Ukraine, but rather by macroeconomic factors and the threat of economic slowdown, which may be the result of Russia's attack on Ukraine.

Robert Rosicki, Member of the Board / Chief Financial Officer at Eurocast