Polish industry accelerates output growth to 19.2% y/y in January

Polish industry accelerates output growth to 19.2% y/y in January
By Wojciech Kosc in Warsaw February 20, 2022

Poland’s industrial production boomed 19.2% y/y in constant prices in January, after growing 16.7% y/y the preceding month, unadjusted data from statistical office GUS showed on January 21.

The expansion shot up well above the consensus line of 14.3% y/y. The energy sector generation drove the January result, the details of the data show.

“We consider this to be a result of improving conditions in global production, including some easing in supply chain disruptions, due to the loosening of restrictions during the Delta variant. The impact of the Omicron variant on Europe and Asia [also] proved significantly less severe compared to the previous wave,” ING said in a comment.

Seasonally adjusted, industrial production growth picked up to 16.4% y/y in January after an expansion of 13.7% y/y in December. The monthly reading showed an unadjusted decrease of 3% (-2.9% m/m in December) but a clear gain of 4.2% upon adjustment (+0.2% m/m in December).

Broken down by the main segments and unadjusted terms, output jumped 51.6% y/y in the utility sector in January, slowing down a little from an expansion of 54.2% y/y the preceding month.

“High natural gas prices continued to support local energy production as well, as this prompted a switch to more attractively priced coal-based electricity production,” ING noted. Production in coal and lignite mining grew 34.9% yy in January.

Production also grew 15.6% y/y (+13.9% in December) in manufacturing. There was a solid gain of 12.6% y/y in water supply and waste management, after adding 9.6pp the preceding month.

Output jumped 32.6% y/y (-0.9% y/y in December) in mining and quarrying.

Overall, production increased in 33 out of 34 industrial segments in January in y/y terms, compared to 30 in December. The fastest expansion – other than in the energy segment – took place in manufacturing transport equipment, chemicals, as well as machinery and equipment.

The outlook for Poland’s industrial sector remains bright with expectations that it will drive GDP growth in the first quarter to around the same high level as in October-December, when the economy expanded an unadjusted 7.3% y/y (7.7% y/y after adjustment).

The January reading of industrial production is supportive of full-year GDP growth of at least 4.5% in 2022, analysts say. Poland’s economy grew 5.7% in 2021 after a pandemic-driven recession of 2.7% in 2020.