Poland's Manufacturing Sector: Return to Contraction Zone Despite Employment Growth

The Polish manufacturing sector must endure another decline in November as order intakes fell at the highest rate in three months, pushing production back into negative territory. This is according to a recent survey by S&P Global. The Poland Manufacturing Purchasing Managers' Index (PMI) fell from 49.2 in October to 48.9 in November, marking the first decline in five months. A value below 50 signals a contraction of activity. The downward trend in orders continued as the weakness of European demand—particularly from Germany—persists. This decrease, which began in March 2022, is the longest in the survey's history. Trevor Balchin from S&P Global Market Intelligence explains that the PMI declined in November due to a sharper drop in new orders, which meant manufacturers could not sustain the brief production increase seen in October. Despite the challenging situation, employment in the sector rose for the second consecutive month, with the strongest hiring rate since February 2022. Companies are increasingly hiring full-time staff to increase their capacity. At the same time, price pressures are noticeably easing, with input prices falling for the sixth time this year and sales prices being reduced at the highest rate since October 2023. Companies report intense price competition and lower costs for raw materials such as metals and chemicals. The 12-month production outlook weakened to the lowest level since December 2022 due to concerns about the European economy and geopolitical tensions weighing on confidence. Nevertheless, the PMI trend suggests that the sector could be approaching a recovery phase, Balchin notes.