In May of this year, the PMI for the manufacturing sector in Poland dropped to 45 points from 45.9 points recorded in April, according to S&P Global.
According to logistics managers surveyed for the PMI index, Polish industry has contracted for the 25th consecutive month, marking the longest uninterrupted period of recession. The PMI index in May stood at 45 points, representing a decrease of 0.9 points compared to April. Due to the methodology of creating this index, it will be challenging to achieve lower values of the indicator in a relatively stable economic environment.
At the same time, the industry does not significantly deviate from the trend in the entire European Union. Most PMI indices are still below the 50-point threshold that separates growth from recession. A month ago, the German PMI was below 43 points. Such a weak condition of the industrial sector in Europe is adversely affecting our producers.
The poor perception of the industry’s condition by surveyed managers was undoubtedly influenced by another sharp decline in new orders. The only component that is declining significantly slower than the others is inventories. This is, however, an obvious consequence of the still slowing production, smaller purchases, and producer price deflation.
PMI data can be a good leading indicator for hard production figures. However, their predictive power sometimes weakens. This seems to be the case this time as well. At least, this is what the GUS data indicate, where the industry cannot quite decide whether it is in recession or still developing.
Mariusz Zielonka, Lewiatan Confederation
