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Polish manufacturing growth eases to nine-month low

Staff Writer | June 6, 2018
The latest PMI survey data signalled a further solid improvement in business conditions in Poland’s manufacturing sector in May, but a slight loss of momentum.
Polish manufacturing
Poland   The PMI fell to 53.3 in May
Output expanded at the slowest rate in nine months, while new order growth remained weaker than its recent trend partly owing to a slight decline in new export business.

There remained evidence of underlying pressure on capacity, however, as backlogs rose at the fastest rate since January 2015 and suppliers’ delivery times lengthened to the greatest extent since December 2010.

The headline IHS 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 fell to 53.3 in May, from 53.9 in April, signalling robust overall growth of the Polish manufacturing sector.

The current expansionary sequence, at 44 months, is the longest since the survey began in June 1998.

That said, it was the lowest reading since August 2017.

The decline in the PMI in May reflected slower rates of expansion in output and employment, partly offset by a greater lengthening in suppliers’ delivery times.

Manufacturing output growth eased to a nine-month low in May.

That said, the rate of expansion remained strong in the context of historic survey data, and extended the current growth phase to 22 months.

The moderation in output growth reflected another relatively modest increase in new orders, compared with the strong trend seen over the current 19- month sequence of expansion.

This in turn partly reflected a marginal decline in new export business during the month.

Survey data highlighted underlying pressure on manufacturing capacity in May.

Backlogs of work increased at the fastest rate since January 2015, and suppliers’ delivery times lengthened to the greatest extent since December 2010.

The increased incidence of delays partly reflected the strongest rise in purchasing activity in five months.

Meanwhile, manufacturing employment growth remained relatively solid, albeit the weakest in 2018 so far.

Input price inflation remained strong in May, and rose to a three-month high.

Firms reported higher prices for steel and the impact of the weaker zloty.

Meanwhile, output price inflation eased for the third time in four months but remained strong overall.

Charges have risen every month since November 2016.

The 12-month outlook for Polish manufacturing output remained strongly positive in May.

Firms linked expected growth of output to new products, new customers and new machinery.