Poland's Purchasing Managers' Index (PMI) declined 0.3 points to 47.1 in January (chart), the economic intelligence company S&P Global said on February 1.

The reading misses the consensus, which assumed a gain of 0.8 points to 48.2. The indicator has now lingered below the 50-point mark separating contraction from growth for 21 consecutive months. The January decline extends the waiting time for a decisive recovery in Poland’s manufacturing sector, green shoots of which are anticipated to appear shortly.

“We estimate that the economic situation in the domestic industry is not as bad as the PMI would indicate, which is suggested by alternative indicators published by the [state statistical office] GUS and the European Commission, as well as the slowly emerging upward trend in seasonally adjusted industrial production,” PKO BP said in a comment.

New orders fell for a record-equalling twenty-third consecutive month, and at the fastest rate in three months, S&P Global noted in its release detailing what drove the fall of the headline indicator. 

“Output, backlogs and purchasing also fell at quicker rates, while the Red Sea shipping crisis led to the worst lengthening in suppliers' delivery times since August 2022. Input prices continued to fall, however, reflecting weak overall demand for raw materials, which fed through to another reduction in output prices,” the index’s compiler also said.

Poland’s PPI index declined 6.4% year on year in December, following a revised fall of 5.1% y/y the preceding month, the latest reading from GUS showed in early January.

There also were some positive signs in terms of employment, which fell only fractionally in January while the 12-month outlook for production was the strongest since February 2022, S&P Global also said.

The most recent actual data from Poland’s industrial sector – covering manufacturing, energy production, mining, and quarrying, as well as water and waste management – showed that the output deepened decline to -3.9% y/y in December after a revised increase of 0.3% y/y the preceding month, GUS showed in late January.

January industrial production and PPI data from GUS are due in the second half of February.