WARSAW (Reuters) – Poland’s manufacturing sector shrank again in February but showed signs of stabilising as new orders declined at a slower pace and inflation pressures eased, a survey showed on Wednesday.
S&P Global’s Polish manufacturing Purchasing Managers’ Index (PMI) rose to 48.5 in February from 47.5 in January, but remained below the 50.0 line that separates growth from contraction. Analysts polled by Reuters had expected a reading of 47.8.
“Although February indicated the continued contraction of the Polish manufacturing economy, the latest PMI survey provided some hope that the sector is heading towards stabilisation at the very least in the coming months,” said Paul Smith, economics director at S&P Global Market Intelligence.
“Both new orders and production continued to decline, but did so at slower rates, whilst cost inflation, which has been a key feature of the downturn, shifted down noticeably to its lowest level in over two-and-a-half years.”
Input price inflation eased as firms lowered purchasing activity, and the net rise was the lowest recorded by the survey since July 2020. Meanwhile, output price inflation also fell, due to reduced cost pressures and weaker market demand.
Business confidence reached a 10-month high, with manufacturers pointing to hopes of increased stability and more orders.
However, staffing levels continued to fall as firms chose not to replace leavers in a business environment that is still negatively affected by the war in Ukraine and inflation.
(Reporting by Alan Charlish; Editing by Susan Fenton)
