Poland: Manufacturing sector contracts at sharper pace in July
The manufacturing Purchasing Managers’ Index (PMI), released by IHS Markit, dropped to 47.4 points in July (June: 48.4 points). The index thus moved further below the 50-point threshold that separates contraction from expansion in the manufacturing sector, where it has been since November 2018.
July’s reading reflected continued marked falls in output and new orders, as well as jobs cuts. New orders fell sharply, broadly at the same pace registered in June, weighed down by weakness in both domestic and external demand. Demand from abroad contracted for a whole year, with foreign sales to the EU registering an especially strong decline. Production was consequently cut, although at a somewhat softer pace, and output expectations were also hit, however firms still projected production to rise going ahead. Compounding the bleak picture, companies reduced inventories, while backlogs of work fell again at a sharp pace, despite a reduction in employment numbers. To conclude, input inflation remained quite subdued, also thanks to falling metal prices, which led output prices to rise marginally.