Poland’s industrial production eases growth in June

Poland’s industrial production eases growth in June
The industrial production expansion was only slightly below the consensus, which assumed growth of 19% y/y.
By Wojciech Kosc in Warsaw July 21, 2021

Poland’s industrial production growth expanded 18.4% year-on-year at constant prices in June, after jumping 29.8% y/y the preceding month, unadjusted data from statistical office GUS showed on July 20.

The expansion was only slightly below the consensus, which assumed growth of 19% y/y. The slowdown only happened due to the reduction of the low base effect from June last year after next to no activity caused by the first COVID-19 (coronavirus) lockdown.

The underlying favourable conditions for Poland’s industrial segment are expected to continue to exert positive influence, Bank Millennium said in a comment on the GUS figures.

[“These are] price competitiveness, a wide range of goods on offer, quick adaptation to market requirements and the growing share in EU’s output. The industrial sector may [also] support the economy by transferring some of the production from geographically distant countries to Poland so as to shorten the supply chain,” Bank Millennium said.

Polish industrial companies may also increase investment to cover for employee shortages, analysts say. 

Seasonally adjusted, industrial production grew 18.6% y/y in the sixth month after an expansion of 29.7% y/y in May. The monthly reading showed an unadjusted pick-up of 4% (-0.8% month on month in May) and a gain of 0.2% upon adjustment (May +0.8% m/m).

Broken down by the main segments, output grew an unadjusted 19.4% y/y (+32.4% y/y in May) in manufacturing. Production also expanded 13.3% y/y (May +17.4% y/y) in water supply and waste management. 

There also was a gain of 14.8% y/y (+14% y/y in May) in the utility sector. Output fell 1.9% y/y (March +5.5% y/y) in mining and quarrying.

Overall, production increased in 32 out of 34 industrial segments in June in y/y terms, the same ratio as in May.

Industrial production data for June are favourable for Poland’s overall GDP expansion in 2021, currently estimated at around 5% with upward-tilted risks. Last year saw a recession of 2.7%.