Poland’s industrial production fell 2.3% y/y in unadjusted terms in March, after expanding 4.9% y/y the preceding month, Poland’s statistical office GUS reported on April 21.

The result is no surprise after the Polish economy entered lockdown in early March in order to contain the coronavirus (COVID-19) epidemic. March was thus the first month of an economic crisis that is expected to lead to a 4-5% contraction of the GDP in 2020. That includes a possible GDP drop of 10% y/y in the second quarter alone, according to Bank Millennium.

“Even if most restrictions on commercial activities are lifted, the outlook for the domestic industry is meagre, due to the weakening of purchasing power of households, the likely process of debt relief and the increase in the savings rate resulting from economic uncertainty,” Bank Millennium wrote in a comment on the GUS release.

In adjusted terms, industrial production declined 4.8% y/y after expanding 3.2% y/y in February, GUS data also showed. In monthly unadjusted terms, industrial production expanded 2.4% in March while falling 7.2% m/m upon adjustment.

Broken down by sector and in unadjusted terms, output in manufacturing fell 3% y/y in March, compared to an expansion of 5.7% y/y the preceding month. 

Output declined 4.8% y/y in the mining and quarrying sector in the third month after declining 9.2% y/y in February. 

In the utility segment, production expanded 4.7% y/y after growing 1.5% y/y the preceding month.

Production also grew 4% y/y in the water supply and waste management segment versus an expansion of 4.5% y/y in February. 

In more detailed terms, carmakers were hardest hit with the segment’s output down 28.6% y/y, GUS said. 

Production also contracted 14.7% y/y in furniture, 11.1% y/y in  electronics, and 10.4% y/y in general machinery. Mining output was also lower, falling 15.9% y/y.

Production increased the most among pharmaceuticals and food producers, by 39.7% y/y and 7.1% y/y, respectively. “This is hardly surprising given the stockbuilding by households ahead of the lockdown,” ING said in a comment.

“The high-frequency data point to a much sharper decline [coming up] in April. Electric energy consumption was down by 5%-6% y/y in late March. It collapsed by 20% y/y during the first two weeks of April, which points to much weaker industrial output,” ING added.