Poland’s industrial production declined 1.4% year on year in constant prices in June (chart), after a revised fall of 2.8% y/y the preceding month, unadjusted data from the statistical office GUS showed on July 20.

Despite the contraction in June, industrial output still came in at 0.2pp above the consensus line, indicating a possible turning point in the industrial sector’s performance, analysts say.

“Today's data from may signal some revival in the industry, but we will have to wait for the next months to confirm this,” Santander Bank Polska said.

Industrial production data are also supportive of the scenario of a “soft landing” of the Polish economy in which “GDP growth in Poland in 2023 will remain positive despite slowdown [and] will not be accompanied by a significant unemployment growth”, Credit Agricole Bank Polska said.

The GDP growth rate in Poland will decrease to around 1% in 2023, although with the risks to that outlook tilted upward.

Seasonally adjusted, output growth fell 0.8% y/y in June, following a decline of 2.4% y/y the preceding month, GUS data showed. 

In unadjusted monthly terms, industrial production added 1.2% in June after growing a revised 4.8% m/m in May, GUS also said. The adjusted month-on-month reading came in at 0.4%, a changeover from a decline of 1% m/m in May. 

Broken down by the main segments and in unadjusted terms, output declined 0.7% y/y in June in manufacturing after falling a revised 2.3% y/y in May. 

Output in the utility sector declined 6.6% y/y in June after a revised fall of 7.4% y/y the preceding month. 

In water supply and waste management, production slid 1% y/y in June, which followed a revised decline of 2.2% y/y in May.

Production also decreased 13.1% y/y in mining and quarrying in June, after falling a revised 11.3% y/y in the fifth month, GUS data also showed.

Overall, production declined in 22 out of 34 industrial segments in June in y/y terms, up from 21 in May. 

Industrial production and other data published this week strengthen the outlook for an interest rate cut by the National Bank of Poland possibly as soon as September.