Polish industrial production growth rebounds to 9.1% y/y in May

Polish industrial production growth rebounds to 9.1% y/y in May
By bne IntelliNews June 20, 2017

Polish industrial production returned to fast growth, expanding 9.1% y/y in May, data from statistical office GUS showed on June 20. Hints of improving growth in investment have become clearer as well.

The reading follows a hiccup in April, when – due to fewer working days – industrial output contracted 0.6% in annual terms. The May result also beats expectations for an 8.6% expansion, confirming analysts’ conviction that the April fall was a one-off and that the underlying trend in industry is one of strong growth. 

After seasonal adjustment, industrial growth came in at 6.5% y/y in May. Industrial production grew 5.5% m/m in unadjusted terms and 1.2% seasonally adjusted.

The growth in May came as a result of improvement across all main four segments of industry. There was an annual expansion of 9.5% in the manufacturing segment, while output in the utilities segment grew 9.6% y/y. Production in mining and quarrying expanded 2.3% y/y, while in the water supply output gained 4.6% y/y. In a more detailed breakdown, 29 out of 34 branches of  industry recorded annual growth in May.

There was also growth in construction output of 8.4% y/y in May, after it expanded 4.3% y/y in April. That points to a strengthening rebound in investment, a long-time drag on overall growth.

Some analysts try to remain cool on the May surge. “Solid expansion of the industry was supported by one-off factors, in particular more working days in May as stabilisation of the market sentiment suggests limited space for further acceleration of industrial output growth,“ Erste noted.

The Austrian bank does point out, however, the positive trend in the construction segment, with domestic peer Bank Millennium concurring. "We expect that the investment dynamics will be positive in the second quarter and will accompany consumption as a growth driver," Bank Millennium noted.

The Polish economy expanded 2.7% last year, with investment especially disappointing. However, GDP surged to 4% y/y in the first quarter.

Data

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