Poland’s Manufacturing Sector Sees Decline, But Hints at Recovery
December’s PMI Reading Points to Contraction
Poland’s manufacturing sector took a hit in December, with the Purchasing Managers’ Index (PMI) slipping to 48.2 from 48.9 in November. This marks the steepest decline since August, according to S&P Global’s latest report. Analysts had predicted a reading of 48.6, but the actual figure fell short.
A Closer Look Reveals Glimmers of Hope
While the headline figure may seem bleak, a deeper dive into the sub-indices suggests that the sector may be poised for a turnaround. New orders, for instance, contracted at the slowest pace in over a year, hinting at a potential recovery.
Output and Stocks Take a Hit, But Employment Remains Strong
The downturn was largely driven by steeper declines in output and stocks of purchases. However, employment in the manufacturing sector continued to rise, albeit at a slower pace than in November. This marks the third consecutive month of growth, a promising sign for the sector.
Domestic Demand Shows Signs of Life, Exports Remain Weak
Domestic demand appears to be on the mend, but exports remain a concern, particularly those to Germany. New export orders fell at the fastest rate in three months, a worrying trend.
Firms Look to 2025 with Optimism
Despite the current contraction, manufacturers are optimistic about the future. They expect economic recovery, export growth, and new client acquisitions in 2025. This confidence is reflected in their hiring decisions, with employment growth expected to continue.
Price Pressures Remain Weak
Input prices fell for the seventh time in 2024, and output prices also declined. This suggests that price pressures remain weak, a positive sign for the sector.
Poland Outperforms Euro Zone
The PMI trended at 48.8 over the fourth quarter, the highest quarterly average since early 2022. Poland’s manufacturing sector outperformed the euro zone, which averaged 48.3. This bodes well for the country’s economic prospects in the coming year.
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