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Poland PMI points to firm expansion in industry

posted onJanuary 5, 2022
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Poland’s Manufacturing PMI increased to 56.1 last month from 54.4 in November, the strongest expansion in factory activity in 5 months, beating market forecasts of 54.1, largely driven by further improvement in new orders and production according to IHS Markit.

“Underpinning this firmer performance was the strongest gains in output and new orders since July and August, respectively. Companies spoke of better demand for their goods, with competitive pricing strategies and the introduction of new goods cited as factors leading to growth in orders and subsequently production. New export orders also increased; the first time growth has been seen in four months,” the economic research company said. 

The IHS Markit Poland Manufacturing PMI has now remained above the 50-point line separating contraction from growth for 18 months straight. The British market researcher's Economics Director Paul Smith was cited as saying that the Polish manufacturing sector "enjoyed a decent month in December, expanding at a stronger rate as both production and new orders picked up."

Smith added in a statement that "confidence about the future also improved as firms eyed a continuation of these positive trends."

However, supply-side challenges persisted in December and worries over price rises crystallized in the form of higher buying activity and safety-stock building. Inventories of purchases held by Polish manufacturing firms rose at an unprecedented pace.

There are fears that difficulties in procuring goods and higher prices will persist in the coming months, IHS Markit said. “This encouraged firms – wherever they could – to purchase goods to help build safety stocks. Purchasing activity rose markedly and helped to explain the sharpest rise in input inventories recorded by the survey to date.” 

Commenting on the strong end to 2021 for Polish manufacturing, ING wrote: “In a broader perspective, today’s data (alongside a solid print in Czechia), bodes quite well for manufacturing activity in the eurozone in early 2022.” 

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