Poland: Manufacturing sector remains mired in contraction in November
The manufacturing Purchasing Managers’ Index (PMI), released by IHS Markit, rose to 46.7 in November from October’s 45.6, which had marked the worst reading since June 2009. The index thus moved closer to the 50-threshold that separates contraction from expansion in the manufacturing sector, below which it has been since November 2018.
November’s less marked contraction was underpinned by softer declines in output and new orders. Both output and new orders have contracted for over a year now, and in November their pace of contraction, albeit softer than in October, remained sharp. Lower domestic and external demand continued to be behind the decline, and led firms to shed more jobs. Meanwhile, businesses’ expectations on production fell to a new record-low due to weaker demand and general economic prospects, and firms reduced backlogs at a sharp pace. To conclude, input inflation slowed to an over three-year low amid falling metal prices, while output prices increased only marginally.
Trevor Balchin, economics director at IHS Markit, commented:
“Though the headline PMI ticked up in November, the Polish manufacturing sector remains mired in its steepest downturn since 2009. […] The longer the downturn goes on, however, the more likely we are to see deeper cuts to workforce numbers, which will pose a threat to the domestic market.”