In March, the value of sold production in Polish industry increased by 0.5 percent year to year, while retail sales in nominal prices increased by 0.8 percent compared to the analogous period last year – show recent GUS figures. – There is no point trying to fool ourselves – these are disastrous figures, ca. 2.5 percentage points lower than expected, in the case of both production and sales. Instead of further dynamic growth, we are slipping into stagnation. However, monthly figures tend to fluctuate a lot, so it is too early to conclude that we are witnessing a reversal of the positive trend – comments Łukasz Kozłowski, expert of Employers of Poland.
Despite the positive impact of earlier Easter (in March, rather than April like last year) on retail sales and the payment of a one-time bonus for pensions, these factors were not enough to stop a decrease in the dynamics of retails trade turnover. Even after taking consumer prices into consideration, the dynamics were at a level of 3 percent year to year, compared to 6.2 percent in February.
Although continued deflation – affecting not only fuel prices, but also many other goods and products – may restrict Poles willingness to make more purchases, there are good reasons to believe that the negative tendency will not persist for long. It is highly likely, that the start of the Rodzina 500+ program will stimulate consumption demand and will have a positive impact on retail sales dynamics for the next 12 months.
Economic indices in Polish industry look quite positive – eg. the PMI index is at the highest level in 8 months – which makes the weak figures under study all the more surprising. However, one should keep in mind that although Easter stimulates consumption, it also contributes to restricted production in a given month. Coupled with a very high statistical base from March 2015, this means that we are dealing with an incidental decrease of dynamics to such low levels.
Łukasz Kozłowski, economic expert of Employers of Poland