The Polish manufacturing sector faced its steepest contraction in over two-and-a-half years in June, with a sharp decline in both output and new orders, according to S&P Global's latest Purchasing Managers’ Index (PMI) survey published in June 2025.

The headline PMI reading dropped to 44.8 in June from 47.1 in May, marking the fastest deterioration in business conditions since October 2023. The two-month fall of 5.4 points is the most significant since mid-2022. Three of the five sub-components of the index – new orders, output and stocks of purchases – registered negative contributions.

“Rates of decline in new orders and output accelerated, and firms continued to reduce employment, purchasing and inventories,” S&P Global noted. “Underlining the subdued conditions, the 12-month outlook for production was among the weakest since the pandemic.”

The downturn in demand that began in April deepened considerably in June. The rate of contraction in new orders was the steepest since October 2023. Manufacturers cited stagnant market conditions, with export orders falling at their fastest rate since September 2023 amid softening demand in key European markets.

Output also declined at the fastest pace since November 2022, marking the second consecutive monthly drop. Manufacturers responded by scaling back hiring, reducing staff numbers for the fourth time in 2025, although the pace of job shedding eased compared to May. Purchasing activity was also curtailed sharply for the second month in a row, while input inventories were depleted at the fastest rate recorded this year.

The outlook for future production has also weakened. “The Future Output Index retreated further from March's 45-month high to the lowest since November 2024,” S&P Global said. Only 24% of firms surveyed expect growth over the next 12 months, with hopes pinned on the National Recovery Plan, recovery in German markets and new product development. By contrast, 19% anticipate a decline, citing weak order pipelines and policy uncertainty.

Price pressures remained muted. Input costs declined slightly in June, ending a three-month stretch of rising prices – the longest inflationary run in over two years. Output prices rose modestly for the fourth time in five months.