Most recent GUS figures show that industrial production has grown by 4.1 percent compared to 4.7 percent in an analogous period the year before (in fixed prices). – This showing is a moderately positive surprise. However, advance indices show that soon we could be dealing with yet another slowdown in industrial production dynamics. Retail sales figures suggest that consumption demand is starting to make up ground on real income growth – comments Łukasz Kozłowski, expert of Employers of Poland.
Last month results of the Polish industry improved compared to a disappointing April, but they remain weaker than in the first half of 2014. We still have not seen the significant upturn in this sector indicated by PMI. Meanwhile, the most recent results of advance research on the industry hint at a worsening of the condition in industry. Thus, there is a risk that production will continues to be one of the weakest sectors of the economy.
Nominal retail sales grow very slowly, but adjusted for deflation it is catching up to real wage fund growth rate. This augurs well for private consumption dynamics – an important component of domestic demand, The growing purchasing power of Polish households will surely have an impact on purchase decisions. This, in turn, is a key factor stabilizing economic growth dynamics when reserves are being restricted and a weakening contribution of spending on fixed assets to GDP growth.
Łukasz Kozłowski, economic expert of Employers of Poland