Polish industrial production contracted 1.3% y/y in October, data from statistical office GUS showed on November 21.
The reading marks a considerable disappointment in the performance of the Polish industrial sector following September’s expansion of 3.2%. That was already a let down on growth of 7.8% in August. The result has analysts speculating Poland is on track for a further slowdown of GDP growth in the fourth quarter after a poor 2.5% in Q3.
In monthly terms industrial production fell 2.5%. The figures come alongside disappointing retail sales results and increasing concern about economic growth. The government is betting on robust growth to keep its social spending programme going while holding the deficit at bay.
The fall in industrial output in October was driven mainly by 8.7% y/y contraction in the utilities segment, as well as a fall of 7.5% in mining and quarrying. Output in manufacturing declined 0.5%. The only segment to see production grow was water supply and waste management, which rose 3.9% on the year.
A 20.1% decline in production in the construction sector also defied hopes for an improvement, having appeared to have passed its trough the previous month.
“It is difficult to say whether the fall in industrial production is permanent but the data do show the dynamics of growth are slowing down. The weak start to the fourth quarter suggest economic growth will be weaker than in the third quarter,” Bank Millennium predicts.
Erste is also pessimistic, predicting growth in the final quarter of the year at just 2% y/y at best.