In 2017, Polish export exceeded 200 billion euros, whilst in the current year, judging by the results after the 1st half, it is set to increase by a few percent. Despite its structure being dominated by cars and automotive parts, the products of machinery industry also play an important role, especially mining machinery, machine tools, lifting devices and agricultural equipment. The situation is similar with import – it also reached record results and has been growing faster than export.
The business environment in Germany, the euro area and international markets, as well as the high pace of development of the Polish economy, create positive macroeconomic conditions for the growth of international trade in Poland. Nowadays, it is easier for Polish exporters to operate on the EU market as well as outside the European Union. One factor which increases the export potential is a wide participation of Polish firms in the corporate chains supplying the global concerns. The advantage of Poland’s export offer is a positive relationship between the price of goods and their quality. It has also been influenced by correct decisions made by many Polish companies with regards to specialization and selection of market niches to focus on.
On the domestic market, machinery industry goods are in great demand – this is thanks to investments in production capacities. Polish firms’ demand for machinery and devices is, to a large extent, met through import. Regardless of this, one factor which strongly stimulates import is the high import intensity of production, visible especially in high-tech sectors.
Uneasy numerical data
The Polish export of machinery and equipment is calculated together with many automotive products and amounted to around 27 billion euros in 2017, 6% higher than in 2016. In the same period, imports increased by as much as 10.2%, which reduced the positive trade balance to around 1 billion euros.
The data for the first half of 2018 point to further growth of the machinery industry (by 4.5%). This, with the slightly faster growth of the machinery and equipment industry (by 7.1%), led to a surplus in trade with products of the machinery industry (0.7 billion euros). It is symptomatic that the share of high-tech goods in the total of Polish exports remains relatively low and did not exceed 9% in 2017.
The ranking of the 50 most important items in Polish export is dominated by cars and automotive parts, whilst there is no mining, construction or agricultural machinery or machine tools. Meanwhile, these products, at least some of them, have been the showcase products of the Polish machinery industry and are known on many markets. The significant role of machinery and devices in the Polish export offer remains unquestionable, even though their sales are currently lower in terms of quantity compared to products such as aviation engines, washing machines, cooling devices, air pumps or gas turbines.
Machine tools stay behind
Machine tools are some of the traditional products of the Polish machine industry. However, export of such machines, considering the fast turnover growth of Polish foreign trade, comes out rather weak. Poland is far on the list of biggest suppliers of machine tools, with the share of global export constituting 0.7% in 2017, and 1.5% in the EU export. It plays a slightly more important role in the import of processing machinery which is indicated by an almost 2% share on the global market and 6% share on the EU market. According to the data from the German Association of Producers of Machinery and Devices (VDMA), in 2017, Polish companies exported machine tools of the total value of 250 million euros. This means a significant growth compared to the year before (by 7.2%). The quantity of export, although growing, remained very low.
Advantages may be greater
The growth of export is a very positive phenomenon. However, it seems that the scale of the so-called export added value is more important - this is the part of growth’s added value of good sales with the ‘made in Poland’ label which are actually manufactured domestically. It turns out that Polish export is, to a large extent, based on imported materials, components and technologies and often not more than a small part of the exported good’s added value was actually produced in Poland. Furthermore, often semi-products exported from Poland return in the form of a product which is more processed.
Export successes confirm the strength of the Polish economy. Yet, it is still far behind the developed EU countries. For the time being, the domestic offer remains relatively humble compared to the French or the German one – few highly processed products are sold, especially final products, the production of which require a high level of supply import. The good news is that Polish entrepreneurs have started investing in modernization and development of machinery stock. Without such actions, maintaining a high level and competitiveness of export would prove more and more difficult.