PMI for industry in Poland grows with prices

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 production increases 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 intensified 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

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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