Polish industrial production expanded 3.3% y/y in November, data from statistical office GUS showed on December 19.
In monthly terms industrial production advanced 1.9%. The annual reading marks a return to growth after industrial output shocked with a 1.3% y/y contraction in October. Still, the slow tempo of growth in November does not completely soothe concerns over economic growth in the fourth quarter.
Analysts claim Poland is on track for a further slowdown of GDP growth in October-December after a disappointing 2.5% in Q3. That weak result was largely driven by falling investment, but industrial output and retail sales also made their mark. The government is still betting on robust growth to keep its social spending programme going while holding the deficit at bay.
The November reading for industrial production was driven mainly by 6.9% y/y growth in the water supply segment. Manufacturing recorded growth of 4.3%.
However, there were contractions in the mining and quarrying and utilities segments. There also was a 12.8% decline in production in the construction sector, although the market expected a much deeper fall.
“Continuation of such a trend may be the first sign of change in the trend of investment,” Erste notes. Falling investment has been a drag on GDP growth for several quarters now.