Weakening Manufacturing Sector in Poland

WARSAW (Reuters) – Poland’s manufacturing sector experienced a decline in December, with the Purchasing Managers’ Index (PMI) falling from 48.9 in November to 48.2, reflecting the strongest deterioration since August, according to S&P Global.

Analysts had expected a PMI of 48.6. A PMI reading below 50 indicates a contraction, while above 50 suggests growth.

Despite this downturn, there are signs of potential recovery, as new orders contracted at the slowest pace observed in over a year. The decline was attributed to significant drops in output and stock purchases, despite a continued increase in employment and a gradual slowdown in the decline of new orders.

Trevor Balchin, Economics Director at S&P Global Market Intelligence, remarked, “A glance at the headline figure would show a worsening downturn… but closer inspection of the sub-indices provides some cause for optimism moving into 2025.”

Domestic demand appears to be recovering; however, exports remain weak, particularly towards Germany, with new export orders decreasing at the fastest rate in three months.

Despite the sharp decline in output—the most significant drop since August—businesses are optimistic about 2025, expecting recovery, export growth, and new client acquisitions.

Furthermore, employment in the manufacturing sector has increased for three consecutive months, although the growth rate has slowed compared to November.

Price pressures continued to weaken, with input prices decreasing for the seventh time in 2024 and output prices also falling.

The PMI averaged 48.8 over the fourth quarter, marking the highest quarterly average since early 2022, while Poland’s performance slightly outpaced the eurozone average of 48.3.