Snap19 March 2018Updated 6 months ago

Poland: February data supports solid 1Q growth

Strong construction output suggests a further recovery in investment. We expect GDP growth close to 5% YoY in the current quarter

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Industrial production slowed from 8.6% to 7.4% YoY in February, below market consensus (8.1%). Still, on a seasonally-adjusted basis, production accelerated from 6.2% in January to 7.3% YoY. Poland's statistical office GUS pointed to the strong performance of export-related sectors (manufacturing of machinery +20.8% YoY, electronics +10.8% YoY, furniture +10% YoY) and industries closely linked to construction (base metal production +15.6% YoY, non-metallic minerals including cement, concrete etc. +13,4% YoY).

We expect robust activity to continue in the coming months as external demand is still solid (i.e. German orders are growing at a high rate). Domestically, sentiment amongst small and medium enterprises is also flourishing. 

Solid external demand supports Polish manufacturing export sectors

GUS, Destatis
GUS, Destatis

SME manufacturing activity is improving

GUS
GUS

Construction output expanded by 31.4% YoY, above market consensus (29.8% YoY). Strong activity is related to infrastructural investment – civil engineering soared by 65% YoY, while construction for special purposes grew 31% YoY. Housing activity was robust at 12.1% YoY.

5.0%

1Q18 GDP - ING forecast (YoY)

Today’s data is consistent with GDP growth close to 5% YoY in 1Q18 (vs. 5.1% in the previous quarter). We expect investment to become a significant growth driver, maintaining double-digit growth (approximately 10.2% YoY vs. 11.3% YoY in 4Q17).