Polish Manufacturing Downturn Slightly Softens

Poland’s S&P Global Manufacturing PMI edged up to 48.8 in January from 48.5 in December, below the expected 49, and remained in contraction for a ninth straight month, though it signaled a slower deterioration. Output and new orders continued to decline but at softer rates, while export demand weakened only marginally despite ongoing softness in German markets. Backlogs of work rose for just the third time in nearly four years, supporting a rebound in purchasing activity, with input stocks increasing at the fastest pace since mid-2022. Employment declined at a quicker rate. On prices, input costs rose modestly for a third consecutive month amid subdued inflation pressures, while output prices increased only slightly. Business confidence strengthened sharply, with output expectations reaching their highest level since June 2021 on hopes of demand recovery, investment, and new markets.

Poland’s S&P Global Manufacturing PMI fell to 48.5 in December from 49.1 in November, marking the eighth consecutive month of contraction and the fastest decline since August. Output decreased at a quicker pace amid weaker new orders, particularly from German and French markets, while new export orders also declined. Employment and purchasing activity contracted only slightly, and stocks of purchases fell modestly. Supplier delivery times lengthened further, though backlogs of work remained above the long-run trend. On prices, input costs rose for the second consecutive month, partly due to higher plastics, metals, and duties, while output prices fell for the third time in four months. On a positive note, business confidence improved notably, with the Future Output Index posting its second-largest gain in five years, supported by expected market recovery, new customers, and development projects, returning optimism to the long-run average.

Poland’s S&P Global Manufacturing PMI rose to 49.1 in November, compared to market expectations and October’s 48.8, marking the fifth consecutive improvement and the mildest deterioration in operating conditions in the current seven-month downturn. Output fell only fractionally, as firms cited reduced orders and weaker demand, though some reported gains from new clients and clearing backlogs. The contraction in new orders remained modest, while export sales increased for the first time since March. Purchasing activity rose for the second straight month, although stocks of purchases continued to decline. Employment fell again but at a slower pace. Input prices increased for the first time in four months, albeit only slightly, while output prices were broadly unchanged following October’s discounting. Business confidence stayed positive, supported by expectations of market expansion, new product launches, and stronger demand, though sentiment eased to a four-month low.