Poland's Purchasing Managers' Index (PMI) eased by 0.5 points to 50.2 in April (chart), the economic intelligence company S&P Global said on May 2.

Despite the weakening, the indicator has remained above the 50-point mark for three consecutive months. However, S&P Global said there were "warning signs that the current upturn was fragile … as new orders fell and the 12-month outlook weakened sharply."

"The nascent recovery in the Polish manufacturing sector was under threat in April despite faster growth in output and a renewed rise in employment. The PMI hovered only just above 50 [points] as new work declined, stocked inputs fell and suppliers' delivery times quickened," Trevor Balchin, economics director at S&P Global Market Intelligence, said in a statement.

Cost pressures increased in April, with average input prices rising for the second consecutive month and at the fastest rate since March 2023. Manufacturers raised their output prices for the third month in a row, albeit at a softer rate. Overall price pressures remained subdued in the context of historic survey data, with both seasonally adjusted indices running below their respective long-run averages.

The April reading has strengthened concerns about the sustainability of the upturn. "Confidence took a hit in April as the volatility in financial markets and uncertainty surrounding global trade looked to stall the recovery," Balchin also said.

The 12-month outlook for output deteriorated sharply in April, with data on manufacturers' output expectations posting the biggest one-month drop on record since the series was first compiled in 2012, excluding the pandemic months of March-April 2020, S&P Global said.

"Anecdotal evidence linked weaker sentiment to an economic slowdown, fewer orders, uncertainty, higher costs and the likelihood of lower exports to the US," the index’s compiler added.

Confidence and new work may recover in May as faster growth in Eurozone manufacturing output, as indicated by the April flash estimate, is expected to underpin demand for Polish goods. Poland’s manufacturing sector is heavily dependent on the state of the economy in the EU, its main export market.

In terms of actual data, Poland’s industrial sector – covering manufacturing, energy production, mining and quarrying, as well as water and waste management – disappointed in March, the latest available figures show.

Output expanded by 2.5% year on year in constant prices in March, after a revised fall of 1.9% y/y in the preceding month, unadjusted data from the statistical office GUS showed on April 22.

While this marked a turnaround from February, the expansion still came as a negative surprise, as consensus forecasts had projected growth of 3.7% y/y for the month.

Meanwhile, the producer price index (PPI) declined by 1.1% y/y in March after a fall of 1.3% y/y the previous month, GUS also said. The statistical office will publish April industrial production and PPI data in the third week of May.