“2021 ended successfully for the Polish manufacturing sector. The industry grew at an accelerated pace thanks to stronger growth in new orders and production. Employment increased as a result of mounting pressures on capacity, and companies reported that they expect positive trends to continue next year. concerns about the continuing difficulties on the supply side and the rise in prices highlighted increased purchasing activity and inventory accumulation – inventories of purchasing items in Polish factories increased at an unprecedented pace, “it wrote.
December’s growth is the strongest since July.
“The improvement in the economic situation was based on the strongest production growth since July and the strongest increase in new orders since August.
competitive pricing strategies and the introduction of new products as factors leading to an increase in orders and, as a result, production “- it was written.
The study shows that new export orders registered their first increase in four months.
The value of the index exceeding 50 points means an increase in industrial activity, and below this threshold – a decrease in activity.
The PMI index for industry in Poland in November was 54.4 points. against the PAP Biznes consensus at 53.9pts. and against 53.8 points. in October. This index increased slightly in November. Research shows relatively stable assessments of demand. As a result, the industry should remain in good shape in 2022.
The PMI index rose in November from 53.8pts to 54.4pts. ie above-market forecasts. Industry performance is also stabilizing in other economies of the European Union.
Markit’s comment emphasizes that entrepreneurs report problems with the shortage of workers, and that strong cost and wage pressure forces them to increase prices sharply.
“In November, the expansion in the Polish manufacturing sector accelerated thanks to faster increases in production and new orders. Meanwhile, the shortage of workforce and problems with recruiting new employees led to a slight decline in employment, and the limited availability of means of production and intensification of price pressure weakened the business optimism of Polish producers” – it was written in the data comment.
The authors of the study report that industrial production increased for the tenth consecutive month and the pace of expansion accelerated.
“The increase was based on an increase in the inflow of new orders due to increased demand. However, orders only increased in the domestic market. Orders from foreign customers fell for the third month in a row,” the report reads.
Research shows that price pressures were still closely related to the supply side challenges. “According to survey respondents, the means of production were scarce all over the world, and suppliers faced logistical and transport problems. As a result, the average delivery time of means of production was significantly extended,” it was written.
The beginning of 2022 will bring stabilization of high assessments of the economic situation in industry. It is worth noting that, unlike last year, the increase in activity reaches a wider group of enterprises – since July, the percentage of companies that indicate insufficient demand as a barrier to their activity – both on the domestic and foreign markets has been systematically decreasing. The rebound is stronger among producers of consumer goods.
Problems with demand are more often reported by manufacturers of transport equipment, machinery and metals. Such results suggest that GDP growth in Poland in the coming quarters will be based more on consumption.
The good condition is also visible in the real results of the industry. We estimate that production will increase by over 9% in November. – such a result means that the slowdown in activity in the fourth quarter will be slight.
The consequence of the high utilization of production capacity and the shortage of raw materials are, however, increases in the prices of finished products – PPI inflation in November will approach 13%.
Polish Economic Institute
In the structure of the data, noteworthy is the strong increase in current production, the component of which has been in an upward trend for four months. Higher production is supported by an increase in new orders. It is worth noting that it was also recorded in the case of foreign orders, which increased for the first time since August 2021.
Growing production and higher orders support employment growth, which picked up in December after a temporary decline in November. We believe that the factor contributing to the increase in temporary employment was also the need to replace employees in quarantine.
The December data also indicated persistent supply barriers. Such an assessment is supported by the components for the prices of intermediate goods used in production, as well as for the prices of final goods, which remain high compared to historical levels. On the other hand, the time of deliveries increased slightly slower than in the previous months. The accumulation of inventories in Polish processing also deserves attention.
According to the Markit announcement, it is favored by companies’ concerns about the availability of products in conditions of persistent supply barriers. As a result, they try to accumulate the necessary components to ensure the continuity of production in the coming months, as well as to protect themselves against an increase in their prices.
The average value of the PMI index in Q4 was 54.8 points. against 55.6 points in Q3, however, this does not change our forecast, according to which the dynamics of Polish GDP in Q4 will increase to 7.0%. y / y versus 5.3% in Q3
In our opinion, today’s data are slightly positive for the zloty exchange rate and Polish bond yields
Credit Agricole Bank Polska SA