Poland's manufacturing PMI, an indicator that measures performance of the sector, dropped to 48.3, its second-lowest reading in 35 months. A reading under 50 indicates contraction of the sector, and August's figure indicated the fifth month in a row where conditions in the manufacturing sector deteriorated in Poland.
The survey data showed yet another monthly fall in new business received by Polish manufacturers. New orders have declined every month since February, the data showed, and the rate of contraction accelerated last month. New export orders continued to decline at a faster rate than total new business, partly reflecting the stronger złoty, said HSBC and Markit, the firms that compile the index.
The volume of inputs purchased fell as well – for the seventh month in a row. Firms said the lower purchasing was linked to reduced output requirements. As a result, stocks contracted for the fifth consecutive month.
The one bright spot was the continued hiring that the manufacturing sector is seeing. August was the fifth month in a row that jobs were created in the sector, although growth was marginal.
In July, the index had showed slightly less-bad figures, which analysts had taken as a sign that the sector might be stabilizing. However, those hopes were dashed with the release of Monday's data.
“The recovery in the previous month, which we took as a tentative sign of stabilisation, has now been followed by a broad based deterioration of all the components of the headline index,” said Agata Urbańska, an economist for Central & Eastern Europe at HSBC, in a statement accompanying the release of the figures.
“The PMI data amplifies the weakening trend observed for real activity indicators and puts increasing pressure for policy response in the face of a likely deeper-than-expected economic slowdown in the coming quarters.”
From Warsaw Business Journal
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