Poland’s manufacturing sector contracted further in December 2024, according to the latest Purchasing Managers’ Index (PMI) released by S&P Global. The PMI registered 48.2, down from 48.9 in November, indicating the sharpest decline in manufacturing activity since August. This figure fell slightly below the Reuters analyst consensus forecast of 48.6. A reading below 50 signifies contraction, while a reading above 50 indicates expansion.
Illustrative example of a PMI chart – replace with actual image from original article if available
Despite the overall contraction, the report revealed potential bright spots hinting at a possible recovery in the coming year. New order contractions slowed to their weakest pace in over a year, suggesting a potential turning point. This deceleration was accompanied by a sustained increase in employment, marking the third consecutive month of job growth in the sector, although the pace of growth slowed compared to November. Furthermore, the decline in new orders also moderated.
Illustrative example of factory workers – replace with actual image from original article if available
The primary drivers of the December downturn were steeper declines in output and stocks of purchases. Output specifically fell at its fastest rate since August. Trevor Balchin, Economics Director at S&P Global Market Intelligence, noted that while the headline PMI figure reflects a worsening contraction, a deeper dive into the sub-indices offers some optimism for 2025.
Domestic demand showed promising signs of recovery, counterbalancing continued weakness in exports, particularly those directed towards Germany. New export orders experienced their most rapid decline in three months. However, Polish manufacturers remain broadly optimistic about the coming year, anticipating economic recovery, export growth, and new client acquisitions.
Illustrative example of a Poland export map – replace with actual image from original article if available
Adding to the positive outlook, inflationary pressures remained subdued. Input prices decreased for the seventh time in 2024, and output prices also trended downwards. The average PMI for the fourth quarter of 2024 reached 48.8, the highest quarterly average since early 2022. Notably, Poland’s manufacturing sector outperformed the Eurozone average of 48.3 for the same period.
In conclusion, while Poland’s manufacturing PMI indicates a continued contraction in December, underlying indicators suggest a potential recovery in 2025. Slowing declines in new orders, sustained employment growth, and easing inflationary pressures provide a foundation for cautious optimism. The disparity between weakening exports and strengthening domestic demand warrants further observation in the coming months.
