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Tuesday, December 5, 2023

Economy. Latest data from industry – PMI for industry in Poland

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The PMI index for industry in Poland in October amounted to 44.5 points compared to 43.9 points in September – S&P Global reported.

“According to the latest PMI data published by S&P Global, business conditions for Polish manufacturers continued to deteriorate rapidly in October. However, for the second month in a row, the overall economic decline was milder, which was mainly due to a less sharp decline in the number of new orders and employment” – the report said.

The state of Polish industry

“This was in contrast to a faster decline in production, backlogs of orders and purchases resulting from companies’ efforts to limit operations and reduce inventories. The latest data indicate further improvement in the condition of supply chains and lower purchase prices of production inputs, which translated into another reduction in production prices, as companies competed for a shrinking pool of orders,” it added. The main PMI index amounted to 44.5 points in October, signaling another significant deterioration in the conditions for conducting production activities. “Nevertheless, for the first time since the beginning of 2023, the PMI increased in consecutive periods, reaching the highest level in four months,” wrote the commentary on the study. As the authors of the report point out, in October, for the sixth time in a row, all five sub-indices of the PMI index achieved negative results. “The increase in the main indicator by 0.6 points compared to the September level of 43.9 points was caused primarily by the number of new orders, and then by the situation regarding employment, delivery times and stocks of purchased items. These results were partially offset by the production component” – it was written.

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The serious slowdown has reached its lowest point?

The October PMI reading gives hope that the current severe slowdown in industry has already reached its lowest point. “In October, the PMI recorded its first consecutive increase since the beginning of 2023, providing hope that the current severe industrial slowdown has bottomed out. However, another sharp decline in new orders, as well as a sharp decline in the backlog of orders and an increase in inventories of finished products suggest that production may decline further in the coming months,” said Trevor Balchin, economic director of S&P Global Market Intelligence, in a commentary on the data. “October’s decline in new orders was the slowest in four months, but it was still steep and extended the current period of severe contraction in demand to twenty months. The ongoing decline in new orders is the strongest in the history of the survey,” he added.

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