Polish industrial production growth accelerated to an unadjusted 7.4% y/y in October, data from statistical office GUS showed on November 20.

The headline figure constitutes a solid rebound against the unadjusted growth of just 2.8% y/y in September, which confused analysts, especially in the context of a surge in the GDP growth in the third quarter that emerged earlier this month.

In adjusted terms, industrial production roughly maintained its growth rate in the tenth month, growing 5% y/y, 0.4pp below the adjusted annual expansion in September.

“The slowdown in the industrial activity abroad has only moderately affected the export activity of domestic industrial enterprises,” Bank Millennium said in a comment on the figures.

The pick-up in industrial activity in October is also out of sync with a drop in the PMI to a two-year low, reported in early November.

The acceleration of growth in the industrial sector could point to the economy maintaining robust growth in the fourth quarter, contrary to the recently dominating forecasts of a slowdown. The economy expanded 5.1% y/y in unadjusted terms in the third quarter while surging to 5.7% y/y upon adjustment.

“We think that given today's data the solid growth of around 5% will most likely be sustained in the fourth quarter as well,” Erste wrote.

Broken down by sector, output in manufacturing grew by an unadjusted 7.3% y/y in October, adding 5.3pp in comparison to the September result. In the utility segment, output grew 11.5% y/y after expanding 10.4% y/y the preceding month.

In the water supply segment, growth came in at 8.6% y/y in the tenth month, compared to 5.5% y/y in September. Production retreated 0.3% y/y in mining and quarrying in October, in contrast a growth of 8.2pp in September.

Meanwhile, output in the construction sector grew 16.4% y/y in unadjusted terms in October, after expanding 20% y/y in August. Adjusted growth came in at 19.9% y/y in October, after growing 19% y/y the preceding month.

In monthly unadjusted terms, industrial production grew 9.9% in October while also growing 1.2% m/m upon adjustment.

In the construction sector, growth surprised to the upside with an unadjusted growth of 22.4% y/y and 19.6% following adjustment. In m/m terms, construction grew unadjusted 7.8% and fell 0.5% upon adjustment.

In January-October, industrial production grew unadjusted 6.1% y/y while the construction sector expanded 17.9% y/y, GUS also said.