Manufacturing conditions strengthen in Poland at end of 2016
This reflected faster increases in output, new orders and employment and renewed growth of exports. Meanwhile the weak zloty, combined with higher metals and oil prices, brought about a surge in inflationary pressures during the month.
The headline Markit Poland Manufacturing PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector.
The PMI remained above 50.0 for the twentyseventh successive month in December, indicating an improvement in Polish manufacturing business conditions. Moreover, it rose further from October’s 25-month low of 50.2 to 54.3, indicating the strongest overall rate of growth in the sector since July 2015.
The upward movement in the PMI reading in December was reflected in all five of its components – output, new orders, employment suppliers’ delivery times and stocks of purchases. The latest figure was well above the long-run survey average of 50.4, although the average for 2016 (51.9) was weaker than those registered in both 2014 (52.0) and 2015 (53.2).
Manufacturers received a boost from new work in December. New orders rose at the fastest rate since March, with new export business expanding for the first time since September.
This, combined with a shaper drop in backlogs, resulted in output growing at the fastest rate since June 2015. Survey data indicated a marked intensification of cost inflationary pressures in the goods-producing sector.
Average input prices rose at the fastest rate since January 2012, linked to the weak zloty as well as higher global metal and oil prices. Moreover, the cumulative build-up of cost pressures in the final two months of 2016 was unprecedented over the survey history. ■
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