Polish industrial production jumps 18.9% y/y off low base and returning demand

Polish industrial production jumps 18.9% y/y off low base and returning demand
By bne IntelliNews April 22, 2021

Poland’s industrial production growth ballooned 18.9% y/y in constant prices in March, after adding 2.7% y/y the preceding month, unadjusted data from statistical office GUS showed on April 21.

The expansion was considerably above consensus, which expected growth of 12.6% y/y, assuming that the acceleration would happen against a very low base in March 2020, caused by the pandemic lockdown, and also thanks to more working days. 

Once again, export-oriented branches of Poland’s industrial segment fared the best in March, data show. Production of electrical equipment, computers and electronic products, cars, and furniture all grew fast, benefiting from the global economic recovery.

Production of investment goods also grew fast in March, although that also was for export, as Polish companies remain reluctant about investment due to the persisting uncertainty about the government’s handling of the coronavirus (COVID-19) pandemic. 

Seasonally adjusted, industrial production also accelerated very clearly, growing 15.7% y/y in the third month after an expansion of 4.5% y/y in February. 

The monthly reading showed an unadjusted pick-up of 18.6% (+4.3% m/m in February) and an expansion of 2.3% upon adjustment (February +0.4% m/m).

Broken down by the main segments, output grew an unadjusted 20.9% y/y (+2.7% y/y in January) in manufacturing. Production also expanded 12.2% y/y (February +8.2% y/y) in water supply and waste management.  

There also was a gain of 5.3% y/y (+4.3% y/y in February) in the utility sector. Output sliding 0.6% y/y (February -6.1% y/y) in mining and quarrying held back the headline figure, although to a very small extent. 

Overall, production increased in 27 out of 34 industrial segments in March in y/y terms. February saw y/y expansion in 17 segments.

“March data on industrial production suggest that GDP decline in the first quarter will be less than 2% y/y. But we have yet to see how retail sales have endured increased restrictions at the end of March,” Santander Bank Polska said in a comment on GUS' figures. Retail sales data are published today.

Barring an unexpectedly dramatic turn in the course of the pandemic, analysts agree that Poland’s economy will recover this year, growing 3-4%. Last year saw a recession of 2.7%.