Poland: PMI inches up marginally in September
October 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) ticked up to 50.8 in September from 50.6 in August. Consequently, the index remained above the 50-threshold, which indicates an improvement in business conditions in the Polish manufacturing sector compared to the previous month, albeit also suggesting the recovery remains subdued.
September’s reading came on the back of a marginal rise in manufacturing output as the sector continued to reopen after the first coronavirus wave’s lockdowns. New orders increased in the month as both demand and exports firmed. As such, employment increased for the first time since June 2019, with job creation rising at the fastest rate in nearly two years. On the price front, although input cost inflation eased from the previous month, price pressures remained strong due to currency weakness. Meanwhile, output charges increased for the first time in six months, but only marginally, however. Lastly, business sentiment improved markedly in the month, with the outlook for production in the coming twelve months logging its strongest reading since May 2019.
Commenting on September’s PMI result and the outlook for business conditions in the Polish manufacturing sector, analysts at ING, reflected:
“Companies seem to be unconcerned over the mounting Covid-19 wave in Europe. On the other hand, the current production assessment deteriorated slightly but still indicates improving activity. Nonetheless, this is another metric suggesting Polish businesses have a V-shaped mindset. We consider the PMI survey a relatively poor proxy for Polish manufacturing though, especially during the pandemic. Local industry is far more diversified compared to other CEE countries, with lower reliance on automakers and a larger share of smaller companies. Still, rising orders are particularly welcome, suggesting Poland should retain a high current account surplus (c.3% of GDP this year) in the coming months.”
Author: Hanna Andersson, Economist