Polish manufacturing picked up in November with the Markit PMI manufacturing index rising from October’s 25-month low of 50.2 to 51.9 in November, indicating a stronger overall rate of growth in the sector. The latest figure was above the long-run survey average of 50.4 and the 50 “no-change” baseline.
Output rose for the fourth consecutive month in November and up from October’s marginal pace. The increase was due to an increase in the volume of incoming new orders, which led to faster growth of both output and employment. On the down side, the volume of new export orders declined further, and average input prices rose at the fastest rate in four-and-a-half years, Markit’s survey found.
Driving the stronger overall improvement was an increase in new orders, although the rate of expansion was broadly in line with the average over 2016 so far. Total new work increased despite a second successive month-on-month decline in new export business, albeit at a rate that remained marginal, Markit said.
Backlogs of work continued to fall, but the rate of depletion slowed as firms took on greater inflows of new business. Companies partly fulfilled demand by selling from stock during the month. Inventories of finished goods declined at the fastest rate since June 2013 as a result.
Manufacturers increased their purchasing activity in November, following a decline in October. That said, the rate of growth was modest, as demand for inputs was partly influenced by high prices.
Average input prices increased at the strongest rate since May 2012, linked to metals prices and the weak zloty. Subsequently, manufacturing output prices rose for the first time in six months.
“Polish manufacturing regained some momentum in November, with the PMI rising to a level slightly greater than the average for 2016 so far,” Trevor Balchin, senior economist at IHS Markit and author of the report said in a press release. “The other key takeaway from the latest survey results was a surge in input price inflation. This fed through to higher manufacturing output prices, with the respective index at its second-highest level in over four years. This will add to expectations that the official rate of consumer price inflation will turn positive in the coming months. IHS Markit expects consumer prices to rise 1.9% in 2017, following a period of deflation that started in mid-2014.”