Poland: Manufacturing sector contracts at softer pace in August
September 2, 2019
The manufacturing Purchasing Managers’ Index (PMI), released by IHS Markit, rose to 48.8 points in August (July: 47.4 points). The index thus moved closer to the 50-point threshold that separates contraction from expansion in the manufacturing sector, below which it has been since November 2018.
August’s improvement was underpinned by slower declines in output, new orders and employment. Both output and new orders contracted for the 10th consecutive month, but at a quite weaker pace. Lower domestic and external demand were behind the decline, although orders from abroad contracted at a sharper pace than from within the country. Meanwhile, businesses’ expectations on production remained gloomy and firms continued to reduce backlogs. To conclude, input inflation remained quite subdued, while growth in output prices gained some speed.
Commenting on the outlook, Trevor Balchin, Economics Director at IHS Markit, remarked:
“Poland has […] witnessed a less severe contraction in manufacturing than neighbouring Germany and the eurozone as a whole. The Polish PMI has now registered above the euro area aggregate since March. The outlook for Poland's manufacturers is predictably uncertain […]. Much clearly hinges on whether Germany and other large European economies fall into recession”