Poland’s industrial production fell 2% year on year in constant prices in August (chart), after a revised fall of 2.3% y/y the preceding month, unadjusted data from the statistical office GUS showed on August 20.
While the consensus expected a fall of 1.7% y/y, analysts say that the worst might have passed and an incremental rebound is on the cards now.
“The industrial sector is probably passing the trough of the business cycle. However, given the poor economic situation in the Eurozone, our main trading partner, the recovery will be slow,” Bank Millennium said in a comment on GUS figures
Overall, Poland’s economy is expected to post slight growth of around 1% in 2023 – but the industrial sector is unlikely to be an important driver.
Seasonally adjusted, output contracted 1.8% y/y in August, following a decline of % y/y the preceding month, GUS data showed.
In unadjusted monthly terms, industrial production expanded 1% in August after falling a revised 8.1% m/m in July, GUS also said. The seasonally adjusted month-on-month reading came in at +0.6%, a changeover from a fall of 1% m/m in July.
Broken down by the main segments and in unadjusted terms, output declined 2.1% y/y in August in manufacturing after a revised fall of 2.1% y/y in July.
Output in the utility sector grew 1.7% y/y in August after a revised fall of 3.2% y/y the preceding month.
In water supply and waste management, production slid 3.4% y/y in August, which followed a revised decline of 0.6% y/y in July.
Production also decreased 7.5% y/y in mining and quarrying in August, after falling a revised 10.1% y/y in the seventh month, GUS data also showed.
Overall, production declined in 23 out of 34 industrial segments in August in y/y terms, down from 24 in July.
Industrial production and other data published this week might give the National Bank of Poland some grounds for another rate cut in October. The NBP’s rate-setting body, the Monetary Policy Council, is meeting early next month before a general election due on October 15.
“A reduction in interest rates is likely before the elections, although on a smaller scale than the September move,” Bank Millennium said. The NBP cut its reference interest rate by 75bp to 6% in September.