- The latest PMI readings for Poland show that our industry is still on a bad run - says Łukasz Kozlowski, expert of the Employers of Poland. June was in fact another month in a row in which the readings were significantly weaker than expected - just 50.3 points against the forecasted 51.0 points and 50.8 points in the previous month.
Only four months after the index reached a level close to the historical records it now stands at the border of stagnation. The latest result - above 50 points - indicates that there is still an improvement in the industry, though is seems to be very small.
Polish companies are struggling with a drop in new orders growth that now stands at zero, which is the worst result in the last thirteen months. Exporters are in an even worse situations as they face an ever increasing drop in demand for their products. Another very important issue is a persistent deflationary pressure, forcing further reductions in prices of finished goods – adversely affecting profitability of manufacturing companies. Despite these difficulties, the level of employment in the industrial sector continues to grow. This is a positive sign indicating that entrepreneurs expect the current problems to be transient.
Nevertheless, the most recent data is so unsettling that the Q2 of 2014 will most probably not be as good for the Polish economy as the first three months of this year. However, most evidence still suggests that the economic recovery in our country is just temporarily slowing down and it is not going to end prematurely. Most companies are looking to the future with considerable optimism and plan new investments. Economic growth will also be supported with the increasing expenditure on current assets needed to restock and - more importantly - growth in household consumption. It is the result of a relatively rapid rate of real income growth and the improvement in the labor market. The probability of long-term stagnation or recession in the industry. Quite a good situation of Poland’s major trading partners – PMI in Germany remains clearly on the growth side.
Łukasz Kozlowski, expert of Employers of Poland