Polish industrial production expanded 3.2% y/y in September, data from statistical office GUS showed on October 19. The reading reveals a considerable slowdown from the 7.5% expansion in August. Some analysts are worried the September reading could signal a slowdown of GDP growth in the third quarter.
However, in monthly terms, industrial production shot up as much as 10.4%. The figures come alongside fairly strong retail sales results, but are not convincing enough to suggest the economy may finally be in with a chance of mounting a bid for sustained growth, according to some. The economy advanced a disappointing 3.1% in the second quarter, in similar vein to the first.
Industrial output in September was driven mainly by 7.5% y/y growth in the mining and quarrying segment, as well as a 4.1% expansion in the manufacturing sector. Output in the water supply and waste management segment rose 2.9% on the year. The only segment to see production contract was utilities, but output dwindled 11.6%.
Despite falling over 15.3% y/y, production falls in the construction sector may have passed their trough. Consensus assumed a contraction of nearly 19%. Analysts claim the sector may finally experience positive reinforcement from a return of investment growth after a long lull, which has also inspired questions on GDP growth dynamics for 2016.
Still, the questions persist as some analysts interpret the retail sales and industrial production growth data as insufficient to forecast GDP growth in the third quarter to exceed 3%. "If GDP growth is revised downward, it will bring more concerns over sustainability of the budget deficit below the fiscal limit of 3% of GDP," Erste notes.