Poland industrial production remains resilient despite European slowdown

In January, industrial production in Poland increased by 0.9% year-on-year compared to the 11.2% strong growth seen in December and the consensus at +1.0%.

The slowdown in the growth is affected by the unfavourable pattern of working days. While in December we had two more in YoY terms, in January there were two fewer days. Adjusted for seasonal factors, the year-on-year growth of production in January (5.7%) was still very strong, close to that of December, and even higher than the 4Q20 average.

In month-on-month terms, production continued to expand by (+1.7%) and is now nearly 5% above the pre-pandemic level of February 2020.

The structure of production shows export sectors such as the manufacturing of computers, electronics, optical products, electrical equipment, rubber and plastic products continued to grow YoY. However, the scale of this growth, due to unfavourable weekday patterns, is much lower than in December.

In January, the production of capital goods declined slightly (by 1.3% YoY) following a strong (9.8% YoY) increase in December. This is largely due to calendar effects. The production of intermediate goods (+4.4% YoY) and consumer durables (+3.7% YoY) increased.

Soft data, such as business sentiment indicators, pointed to a relatively good situation in Polish industry in January. Their readings improved slightly compared to December. This was also confirmed by short-term economic activity indicators (WAI) based on population mobility and daily industrial indices. They suggested that activity in Poland was still relatively good in January, and even grew slightly in early February, despite the simultaneous slowdown in Germany and the UK in 1Q21.