Polish industry fell into the red for the 28th time in a row. The PMI index for the Polish industry in August was 47.8 points, compared to 47.3 points in July, S&P Global reported.
The PMI index is a leading indicator. Its purpose is to forecast the future state of industry or services before real data, e.g. on industrial production or retail sales, hits the market. An indicator value above 50 points indicates a revival in the sector, while a value below 50 indicates a contraction of the industry.
PMI in August 2024
The report's authors say that in August the manufacturing sector contracted for the twenty-eighth time in a row (the longest sequence of declines since the survey was first conducted in 1998).
“New orders, production, backlogs and employment fell again, but the pace of each decline slowed since July. The outlook for the next 12 months improved and inflationary pressures remained weak, with input costs and finished goods prices falling since July,” the study said in a commentary.
The report showed that the latest reading was the highest in five months and also exceeded the current sequence trend (45.6) which has been below the neutral threshold of 50.0 since May 2022.
“Demand for Polish industrial products continued to shrink”
“The improvement in the August reading of the main indicator was influenced by the three most important sub-indices that make it up – new orders, production and employment. Demand for Polish industrial products continued to shrink in August. New orders fell for the 30th month in a row (the longest downward trend in the history of the survey), although the pace of decline was the slowest in five months and also weaker than the average for this period,” it was written.
The report showed that export sales also fell for a record 30th consecutive time, and by more than total new orders. Manufacturers pointed to weak economic conditions in Europe, particularly in Germany.
Polish manufacturing companies cut production for a record twenty-eighth consecutive month in August. However, as with new orders, the pace of decline slowed to a four-month low. Unfulfilled orders continued to fall as the order book fell for the twenty-seventh consecutive month. Finished goods inventories, meanwhile, rose for the first time in five months.
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