In July, the value of sold industrial production decreased by 3.4 percent compared to an analogous period the year before, while retail sales in fixed prices increased by 4.4 percent year to year – show most GUS figures. – July figures in Polish industry are extremely weak and cannot be completely explained by statistic effects or an unfavourable difference in the number of working days. The value of sold industrial production shrunk at the fastest rate (year to year) in 3.5 years. This is a cause for concern, though a bad showing from one month does not mean that he current, relatively favourable, trend will break down – says expert of Employers of Poland Łukasz Kozłowski.
Despite the fact that a serious downturn, or even a drop in the value of industrial production, was to be expected – signaled a.o. by a poor PMI figure – the extent of it is surprising. Production dropped in 2/3 of the sectors surveyed by GUS: the automotive industry; the energy, metal, chemical and machine industries; while the situation of the pharmaceutical, textile and furniture industries is still positive. The construction industry remains in a very bad state and continues to sink into a slump after a weak short-term bounceback almost a year ago. Hope for improvement is provided by continued investment financed from EU funds. However, these will only be made accessible on a large scale late this and early next year.
Despite the continuous improvement of the situation on the labour market and the increasing wage growth rate, Polish households are still only moderately inclined to increase consumption. Even the start of the Rodzina 500+ program did not improve this. If negative signals continue to appear, one should expect uncertainty to translate to consumer behavior, making customers even more cautious in spending.
Łukasz Kozłowski, economic expert of Employers of Poland