The conflict between the United States and Israel and Iran has become a major source of uncertainty for the global economy and a factor forcing economists to revise their forecasts. Sector analysts at Bank Pekao S.A., in their annual publication, present an extensive scenario analysis outlining how prolonged tensions could affect various sectors of the Polish economy.
Two Alternative Forecasts for Key Industries
As every year, analysts from Bank Pekao summarize the performance of major sectors of the Polish economy in their report “Sector Barometer”, reviewing developments in 2025 and presenting forecasts for the current year. This year’s edition appears at a particularly turbulent moment, as the escalating conflict in the Persian Gulf region has shaken global energy markets and significantly increased uncertainty—especially regarding companies’ operating costs and the outlook for the European economy.
The conflict involving Israel, the United States and Iran has already prompted revisions to macroeconomic forecasts. Expectations for economic growth, consumption and investment have been revised downward. The main drivers of these changes include higher fuel and energy prices, delays in the interest-rate cutting cycle, and weaker domestic and foreign demand.
“The tense geopolitical situation and uncertainty about further developments in the Middle East led us to prepare two forecasts for Polish industries. The first reflects a relatively mild baseline scenario. The second, alternative scenario assumes that the conflict in the Persian Gulf will last longer and that Brent crude prices will remain above USD 100 per barrel for an extended period. In such a scenario, companies could face cost pressures similar to those seen during the 2022 energy shock, but this time under weaker economic conditions, which would make it harder for firms to pass higher costs on to customers,”
says Krzysztof Mrówczyński, sector analysis manager and lead author of the report.
2025: A Year of Moderate Improvement for Polish Companies
In 2025, Poland once again ranked among the fastest-growing economies in Europe, with GDP increasing by 3.6% year-on-year, driven primarily by strong consumer demand and a recovery in industrial manufacturing. However, the long-awaited rebound in construction has yet to materialize, while cost pressures—especially from rising wages—remain a significant challenge for companies.
Profitability in the corporate sector improved, but the share of unprofitable companies remains relatively high. During the first three quarters of the year, one in four medium-sized and large companies reported losses. Nevertheless, toward the end of the year there were increasing signs of improving financial conditions among firms, providing a basis for cautious optimism about the coming months.
Forecasts made for the previous year proved accurate in several areas. The agriculture and energy sectors maintained strong performance despite unfavorable price trends. The waste management industry also continued to perform very well. Despite wage pressures, many service sectors—including accommodation and hospitality, information and communication, and business services—reported solid results.
In the trade sector, intense price competition and pressure on margins persisted, particularly in the automotive and FMCG segments. Meanwhile, companies trading in investment and intermediate goods remained in a difficult situation due to the delayed recovery in construction, which only began to show signs of improvement in the final quarter of the year.
“There were both positive and negative surprises. Faster-than-expected improvements in financial performance were recorded in sectors such as the automotive industry, machinery manufacturing and commercial construction. On the other hand, the lack of the expected rebound in exports continued to affect the wood and furniture industry, while weaker investment growth worsened the situation of engineering construction companies. This also contributed to ongoing difficulties in energy-intensive industries supplying materials, such as the mineral and metal industries,”
says Paweł Kowalski, co-author of the report.
How the Middle East Conflict Could Affect the Economy
A prolonged conflict in the Persian Gulf region could have a significant impact on the condition of Polish industries through two main channels.
First, through rising costs of energy commodities—oil, gas, and consequently electricity and materials. The sectors most exposed include energy-intensive industries such as metal processing, mineral products, chemicals, paper production and wood processing, as well as transport and construction. In agriculture, a key challenge may be fertilizer prices, since fertilizer production is highly dependent on natural gas prices. In 2026 the crisis could also put pressure on the margins of companies in the utilities sector.
Second, the conflict may weaken demand in the eurozone. Persistently high commodity prices could fuel inflation, slowing consumption and exports in Europe. As a result, industries producing consumer goods with strong exposure to EU markets—such as home appliances and electronics, furniture and textiles—may once again fail to see the long-awaited recovery in 2026.
Other Factors Affecting Industries in 2026
Although the Middle East conflict remains the main source of uncertainty, other factors will also shape the business environment in 2026.
A positive and relatively resilient growth driver is expected to be the recovery of public investment, already becoming visible and supported by European Union funds.
“On the demand side, this will benefit construction, manufacturers of building materials—especially mineral and metal industries—as well as companies providing services for construction, including freight transport, warehousing and logistics, equipment rental and leasing, and design offices. It will also support the defense industry and producers of investment goods such as electronics, machinery and equipment,”
explains Krzysztof Mrówczyński.
However, companies may face another challenge in the form of rising material costs, driven not only by geopolitical tensions but also by intensified infrastructure investments and the implementation of the Carbon Border Adjustment Mechanism (CBAM), which may increase the prices of metal and chemical semi-finished products imported from outside the EU.
In contrast, labor costs are expected to become a slightly smaller issue in 2026. Wage pressure will ease somewhat, although it will still remain a significant challenge, particularly in manufacturing and construction.
The regulatory environment will also introduce new obligations. ESG directives and regulations affecting the energy sector, construction, the labor market and artificial intelligence are shifting the pressure from reporting toward operations and product development. At the same time, the AI-driven technological revolution will accelerate automation, increasing pressure on productivity and innovation—especially in business services and manufacturing.
Sector Outlook for 2026
In the baseline scenario, assuming a relatively quick resolution of the conflict, the best prospects are expected for service sectors such as accommodation and hospitality, information and communication, and business services. These industries benefit from solid domestic demand and greater flexibility in pricing.
Meanwhile, manufacturing and construction, despite an expected improvement in economic conditions, remain the sectors most vulnerable to potential cost and demand shocks.
In the crisis scenario, where the conflict in the Persian Gulf persists for longer, forecasts worsen for most sectors—particularly energy-intensive industries such as metal processing, mineral production, paper and wood industries. This would also negatively affect transport and construction, which would face much stronger cost pressures.
However, a few sectors could potentially benefit. Mining may temporarily gain from rising commodity prices, including coal. Some segments of the chemical industry could also benefit from reduced competition from the Middle East and higher prices of semi-finished products.
Additionally, several sectors are considered relatively resilient even in a pessimistic scenario, including business services, information and communication technologies, and waste management, which could maintain moderately favorable prospects despite the crisis.
The report “Sector Barometer 2026: The Economy in the Shadow of War in the Middle East. Industry Outlook Under Two Scenarios” was prepared by the Sector Analysis Team of Bank Pekao S.A., including Krzysztof Mrówczyński, Paweł Kowalski, Grzegorz Rykaczewski, Ewa Kurek, Marcin Gancarz and Wiktor Mrozowski.
