Downturn mood eases in Polish manufacturing as PMI grows to 47.5 points in January
Poland's Purchasing Managers' Index (PMI) picked up 1.9 points to 47.5 in January (chart), the highest reading in eight months, the economic intelligence company S&P Global said on January 2.
Still, the indicator remains below the 50-point mark separating contraction from growth, where it has stayed for nine consecutive months now. But, S&P Global’s Economic Director Paul Smith notes, “rises in a number of key indices … adds further to hopes that the worst of the industrial recession is behind us”.
Output and new orders both continued to fall while jobs were lost again in the sector in January, S&P Global said in an analysis. Purchasing activity was lowered markedly as firms continued to pursue destocking policies.
“Price indices shifted upwards despite anecdotal evidence of further stabilisation in input supply. Confidence in the future did however improve to its highest level since last May,” the index’s compiler said.
Most recent real data from Poland’s industrial sector shows output at its lowest since the beginning of 2021, as December production inched up 1% y/y in December, easing from a gain of 4.5% y/y the preceding month and also 0.7pp below the consensus line.
“The rapid rebound of the PMI index suggests that the worst wave of fears and the downturn in the manufacturing industry have already passed,” PKO BP noted in a comment.
“With the weakness of the production in the segment of durable consumer goods – furniture, electronics, household appliances – other industries like investment and automotive are becoming growth drivers,” PKO BP also said.
January industrial production data from GUS are due on February 20.
Since 2018, economy has carried risk of severe balance of payments crisis. For the removal of that risk, the central bank’s net in and off-balance sheet FX position should at least turn positive.
Decline of 6.5% y/y is second worst in EU.
Retail sales rose by 0.9% m/m in October, recouping the losses incurred over the previous three months.
Czech retail sales decreased by 1.4% year on year and increased by 0.6% month on month in October, in the softest monthly drop in a year and a half. The drop in sales eased compared to the 4% y/y drop in September and the 2.8% y/y drop in August.
Despite lapse in demand, firms said to retain positive attitude on 12-month outlook for activity, which remained historically elevated. Inflationary pressures continued to retreat.
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