Poland: The manufacturing sector starts 2018 on solid footing
February 1, 2018
The manufacturing Purchasing Managers’ Index (PMI), released by IHS Markit, slipped to 54.6 in January, down from December’s 34-month high of 55.0. It nevertheless remained comfortably above the 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for over three years, the longest expansionary sequence since the survey started in June 1998.
January’s moderation was due to slower output growth. Production nonetheless expanded robustly, driven by the fastest rise in new orders in three years. Growth in new orders benefited from both buoyant domestic and external demand, with foreign demand expanding at a faster clip than in the previous month. This brought firms to hire more staff and led to an accumulation of backlogs of work. On the price front, input cost inflation intensified, leading output prices to rise at the strongest pace since April 2011. Business sentiment was once again buoyant in January, hitting the highest reading since April 2017, as firms grew more optimistic in their expectations on the future economic situation and new orders.
Trevor Balchin, Economics Director at IHS Markit, commented on the positive momentum in manufacturing activity, adding that, “The dip in the headline figure reflected a softer increase in output and less supplier delays than in December. That said, production growth was strong overall and capacity constraints remained evident.”
Poland Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 6.0% in 2018, which is unchanged from last month’s estimate. For 2019, the panel sees fixed investment expanding 5.2%.