Poland's Purchasing Managers' Index (PMI) dropped sharply to 47.1 in May from 50.2 in April, marking the steepest monthly decline in nearly three years, the economic intelligence company S&P Global said on June 2.

The reading fell below the crucial 50-point mark – which separates expansion from contraction – for the first time in three months. The drop reflects a rapid deterioration in business conditions in the manufacturing sector, as new orders declined at the fastest pace in six months, particularly in the automotive, energy and construction sectors.

“The May PMI reading suggests a sharp deterioration in conditions in Poland’s industrial sector, driven mainly by weakening demand, global trade disruptions, and rising uncertainty,” PKO BP said in a comment. 

“Poland's 2025 manufacturing recovery was derailed in May, as a sharper drop in new orders impacted output, purchasing and hiring,” said Trevor Balchin, economics director at S&P Global Market Intelligence. 

“The PMI recorded its steepest one-month fall in nearly three years, with only suppliers’ delivery times having a positive contribution,” Balchin also said.

Output fell for the first time in four months, while employment, purchasing activity and inventories were all cut. The May reading reflects the sharpest overall deterioration in manufacturing business conditions since June 2024.

Cost pressures persisted. Input prices rose for the third consecutive month – marking the longest inflationary stretch in over two years – though the rate of increase eased and remained below the long-run average. Meanwhile, output prices declined slightly for the first time in four months.

The 12-month outlook weakened further, with the Future Output Index falling to its lowest level in 2025 so far. S&P Global noted that while manufacturers still expect to secure new clients and launch new products, subdued demand and fewer new orders have affected sentiment.

“The June figures will be eagerly awaited to see if the manufacturing sector can regain momentum moving into the summer,” Balchin said.

According to PKO BP, the outlook is moderately positive in the medium term, “supported by rising investment in the defence sector, the development of renewables, gradual recovery in the eurozone and the use of EU funds, which will bolster demand for industrial goods.”

In terms of actual data, Poland’s industrial sector – which includes manufacturing, energy, mining, and waste management – surprised with a 1.2% year-on-year expansion in constant prices in April, according to unadjusted data from the statistics office GUS released on April 22. 

While this followed a revised gain of 2.4% y/y in March, the consensus had assumed a fall since analysts expected a slowdown in growth due to last year’s high base.

Meanwhile, the producer price index (PPI) dropped by 1.4% y/y in April after falling a revised 1% y/y the month before. GUS is set to release May industrial production and PPI data in the third week of June.