Poland’s industrial output reading fell short of expectations in January but turned positive despite an unfavourable external environment. At the same time, PPI deflation deepened to -9.0% year-on-year. Economic recovery in 2024 will likely rely on domestic demand, while soft export demand and a strong PLN may weigh on GDP performance .

Industrial production rose by just 1.6% YoY in January , following a 3.5% YoY decline in December (data revised upwards). The improved annual growth was supported – among other things – by calendar effects.

The seasonally adjusted data indicates that the gradual recovery of Polish industry is continuing despite a number of unfavourable factors. Industrial production recorded a slight decline of -0.2% month-on-month (seasonally adjusted) after a very strong December, when growth was around +2.9% MoM. Production in manufacturing (where there is no impact of volatile data from the energy sector) also increased by 1.6% YoY (NSA).

Among the major divisions of industry, the largest increases were in repair, maintenance of machinery and equipment (32.4% YoY), manufacture of passenger cars, trailers and semi-trailers (21.0% YoY) and other transport equipment (20.4% YoY). The deepest declines were in the manufacture of electrical equipment (-26.2% YoY), coal mining (-15.3% YoY) and the manufacture of other non-metallic mineral products (-9.2% YoY). In the main groupings, the production of capital goods and non-durable consumer goods increased, while production of intermediate, energy and durable consumer goods decreased. This suggests weak export demand (low production of intermediate goods) and a cautious attitude from consumers towards purchases of durable goods.

Source : GUS Poland