Poland's manufacturing sector showed signs of recovery in July as the downturn eased significantly, according to the latest S&P Global Purchasing Managers' Index (PMI) data. The index rose to 49.0 from 46.1 in June, beating analyst expectations of 47.5. While still below the 50-mark that separates growth from contraction, the improvement signals a stabilizing economy.
Key highlights from the report:
- Output and new orders declined at a much slower pace, with new orders extending a downturn that began in April but at a notably reduced rate.
- Employment increased for the first time in 15 months, albeit marginally, marking a positive shift in the labor market.
- Overseas demand remained weak, with new export orders falling for an eighth consecutive month, though at the slowest rate since January.
- Price pressures eased: Input costs rose for a ninth month but at a five-month low, while output price inflation slowed to its weakest since March.
- Business sentiment improved slightly from June's slump, with expectations tied to anticipated orders, new projects, and government/EU support programs.
According to Trevor Balchin, Economics Director at S&P Global Market Intelligence, "The PMI regained most of the ground lost in June at the start of the second half of the year, mainly reflecting slower declines in output and new orders and a rare increase in employment."
While the Future Output Index remained below its long-run trend, the overall picture suggests that Poland's manufacturing sector is stabilizing after a challenging period. This could be a positive sign for the broader European economy.
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