Polish industrial production continues flight in April against last year’s low base

Polish industrial production continues flight in April against last year’s low base
By bne IntelliNews May 24, 2021

Poland’s industrial production growth skyrocketed 44.5% year on year at constant prices in April, after jumping 18.9% y/y the preceding month, unadjusted data from statistical office GUS showed on May 24.

The expansion was in line with the consensus that assumes that the spike in output growth would happen against the very low base in April 2020 caused by the pandemic lockdown.

“Production of durable consumer goods is still growing the fastest, supported by the recovery of consumer demand. Production of capital goods is also gradually recovering. Exports remain an important driver of the industrial sector, as production in the export-oriented segments expanded the most,” Bank Millennium wrote in a comment on GUS figures. 

Seasonally adjusted, industrial production boomed 44.7% y/y in the fourth month after an expansion of 15.7% y/y in March. 

The monthly reading showed an unadjusted pick-up of 9.2% (+18.6% month on month in March) and a fall of 0.4% upon adjustment (March +2.3% m/m).

Broken down by the main segments, output grew an unadjusted 50.6% y/y (+20.9% y/y in March) in manufacturing. Production also expanded 20.1% y/y (March +12.2% y/y) in water supply and waste management.  

There also was a gain of 11.5% y/y (+5.3% y/y in March) in the utility sector. Output grew 2.3% y/y (March -0.6% y/y) in mining and quarrying.

Overall, production increased in 32 out of 34 industrial segments in April in y/y terms. March saw y/y expansion in 27 segments.

The data for April show “a soft start to Q2 but this should not have come as a major surprise given the tightening of containment measures,” Capital Economics noted. 

“New virus cases have fallen, the vaccine rollout has gathered pace and the government has re-opened parts of the hospitality and leisure sector, including outdoor dining and cinemas. We expect a sustained recovery in activity to take hold from May onwards, with GDP expanding by 4.3% over 2021 as a whole,” the London-based analytics company added.

Analysts from Poland’s state-controlled bank PKO BP are much more optimistic.

“The upward trend in industry may be higher than we previously expected, coming in at 5%-6% y/y. If this is confirmed in May data, which is published in June, it would mean that GDP growth in 2021 may be higher than we currently estimate, at close to 6% rather than the currently forecast 5.1%,” PKO BP said.

Last year saw a recession of 2.7%.