According to latest GUS figures, the value of sold industrial production in fixed prices increased by 3.8 percent year to year while nominal retail sales increased by 1.2 percent. – This a disappointing showing, particularly with regards to retail sales. Despite an economic upturn, consumers are still rather cautious when making decision about acquisitions. The impact of a.o. decreasing fuel prices also has to be kept in mind. When it comes to industrial production, the situation is similar – although the year to year growth rate is much lower than in June, non-seasonal data point to only a moderate downturn in activity – comments Łukasz Kozłowski, expert of Employers of Poland.
Retail sale figures are the biggest disappointment. Even after taking the impact of deflation into account they only grew by 3.5 percent year to year, that is almost two time slower than last month and significantly below the average for the last two years. Real wage fund dynamics, which has recently maintained the highest level in ca. 6 years still does not translate fully to an increase in consumption.
However, with an above-average wage increase relatively low consumption dynamics should not be seen as a clearly negative phenomenon. As a result, households increase their savings and in turn build the capital base of Polish economy. One should also be aware that the weak showing in sales dynamics are partially cause by significant decreases in fuel prices.
The industrial production dynamics are much closer to market prognoses. It was unlikely that last month’s extraordinarily good figures would be maintained. Lower figures were caused by decreased mining and restrictions in production, including the production of electricity – by 2 percent in terms of value compared to July 2014. Given a deepening of these problems this month, the next showing in sold industrial production may be quite weak. However, the general climate in this sector remains positive.
Łukasz Kozłowski, economic expert of Employers of Poland