The PMI index reflecting the moods in Polish industry in July was 57.6 points against 59.4 points in June, Markit reported. Despite the decline, the July reading was the second highest result recorded in the history of the survey.
PAP Biznes consensus indicated that the PMI will be at 59.1pts. In June, the index reflecting the economic situation in the domestic industry was at the highest level in history of 59.4 points.
Comment on the data
“The pace of expansion has slowed somewhat compared to the June record, reflecting weaker growth in production, new orders, employment and purchased inventories. Nevertheless, all of these indicators again recorded a rapid pace of growth against historical research. In addition, backlogs and purchasing activity increased significantly again.” Delivery times have increased to a record extent and the pace of cost inflation has slowed down from the record in June, “the commentary on the data wrote.
The authors of the study write that the reading of the main index was still driven by record delays in deliveries.
“The index for this variable hit a record low for the fifth month in a row, which in the case of the inverted index raises the reading of the headline PMI. The delay in delivery is clearly a factor hampering the growth of production relative to new orders, causing a sharp build-up of backlog. positive as production growth will be supported in the coming months, even if the inflow of new orders continues to slow down, “it wrote.
The July PMI reading comes as no surprise, as last week the index calculator Markit released preliminary July PMI figures for some of the largest global economies. They show that after reaching high values, indicators showing the economic situation in industry stopped growing.
The reading of the July PMI for domestic industry means that its value for the 13th time in a row was above the equilibrium level of 50 points, separating the slowdown from the recovery in a given sector.
The PMI index is a leading indicator and aims to show the outlook for the economy. The index value above 50 points means recovery in the sector, and below – shrinkage of the industry. It is calculated on the basis of five sub-indices – new orders, production, employment, delivery times and inventory of purchased items.
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