Poland’s industrial production declined 1.5% year on year in constant prices in November (chart), after a revised increase of 4.6% y/y the preceding month, unadjusted data from the statistical office GUS showed on December 19.

The reading surprised to the downside, as analysts expected no y/y change in the eleventh month.

“The November industrial production data was not impressive, but on the other hand, not all of the spectacular month-on-month rebound from October was offset by November's slowdown,” Santander Bank Polska said in a comment on GUS release.

"The industrial sector continues to neither collapse – as its German counterpart has – nor exhibit the type of expansion seen in previous economic cycles. We expect that in 2025, a combination of still decent domestic consumption growth and a recovery in the construction sector driven by EU funds will enable positive growth in production volumes,” the bank also said.

Driven by consumption and investment, Poland's GDP is expected to grow around 3% in 2024 before accelerating to 3%-4% in 2025.

Seasonally adjusted, output expanded 1.1% y/y in November, following a gain of 3.9% y/y the preceding month, GUS data showed. 

In unadjusted monthly terms, industrial production fell 5.4% in November after a revised gain of 9.9% month-on-month in October, GUS also said. Seasonally adjusted, output slid 2.8% m/m after growing 4.6% m/m the preceding month. 

Broken down by the main segments and in unadjusted terms, output decreased 1.9% y/y in November in manufacturing following a revised gain of 4.9% y/y in October. 

Output in the utility sector grew 5.6% y/y in November after an increase of 4% y/y the preceding month. 

In water supply and waste management, production eased growth to 5.4% y/y in November after adding a revised 7.6% y/y in October.

Production fell 7.9% y/y in mining and quarrying in November, after retreating a revised -3.9% y/y in October, GUS data also showed.

Overall, production expanded in 18 of 34 industrial segments in November in y/y terms, compared to 24 the preceding month.

The new data does not alter the outlook for monetary policy. 

The NBP cut its reference interest rate by a combined 100bp to 5.75% in September and October last year. The central bank is expected to begin monetary easing around mid-2025 although that remains pending on several factors having impact on inflation, such as the labour market.