This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Services have been the main engine of the economy for several years. Output in the sector – measured as turnover generated by service companies employing at least 10 people – was one-third higher in December than in 2021. By comparison, production in manufacturing was up by 14% over the same period.
Why are services growing so fast?
There are two main explanations for this wide gap – statistical and real. Let’s start with the statistical. Statistics Poland (GUS) reports services output indexed to 2021. Much of that year was marked by pandemic lockdowns, which sharply curtailed activity in accommodation and food services. This statistical base slightly inflates the apparent growth in services. In contrast, manufacturing in 2021 experienced a post-pandemic boom, so using that year as a benchmark somewhat depresses industrial growth figures.
Interactive chart Even after accounting for these effects, the expansion in services remains impressive. Of the six main service categories tracked by GUS, output in each is significantly higher than the 2021 average. The strongest growth was in accommodation and food services, which in December was 53% higher in constant prices. Even more important is the rise in the information and communication sector, where output in December was 44% above the 2021 average. A key driver within this category is IT services.
It is also worth noting the strong surge in real estate services. Output in December was 26% higher than the 2021 average, signaling an improvement in market conditions.
Where does the growth in services come from? Much of it is a natural outcome of economic development. Generally, the higher the level of development, the smaller the role of goods in meeting consumer needs, and the greater the role of services. This reflects their very nature. Put simply, beyond a certain point, consumers do not need to eat more or acquire more computers, furniture, or cars. Instead, they travel more, dine out more often, and consume entertainment such as films and concerts.
The production of some services is also boosted by rising exports. This is particularly true for IT and transport companies, where foreign demand is a significant growth driver.