On Thursday we got to know important data from the Polish economy. It turned out that industrial production in August was 7.1 percent. lower than in July. This translated into a result by only 0.7 percent. Better than obtained in August 2024 – said the Central Statistical Office (GUS).
Economists' forecasts assumed a monthly drop in production by as much as 7.4 percent. and an annual increase in the indicator by 0.5 percent After in the same report of the Central Statistical Office a month ago, the dynamics were positive in both cases, at 0.4 and 3 percent, respectively. So it is recourse, but it promised to be a bit worse.
Poor industrial production. There is a problem with competitiveness
“Industrial production remains in a stagnant trend with poor demand from abroad and problems with the competitiveness of Polish and European business” – economists of ING Bank Śląski comment on the situation.
They add that the August report on the industry has maintained the industry stagnation that has been going on for over three years. Explain that The decline in the German economy and uncertain prospects for exporting the euro area contribute to this significantly.
“These are key markets for Polish processing products, and domestic manufacturers are often important suppliers of components, which ultimately make up the export of euro area countries. problem with the competitiveness of the Polish industryafter a jumping increase in wages in recent years, with simultaneous investment arrears of companies and increasing competition from Asia ” – ING experts diagnose the situation.
They also point out that the US-EU trade agreement limited the uncertainty in the terms of trade between Europe and the United States, however, New higher customs rates for the import of European goods to the USA do not give grounds for optimism as to improving the condition of exports on the Old Continent in the coming months.
See also: The Polish defense industry awaits the revolution? The President of the ARP announces opening to the private sector
They suggest that in the average time a factor potentially supporting the Polish industrial sector may be a stimulatory package planned in Germany, although its positive impact on Poland may be limited, because we are not an important exporter of investment goods.
“With the weakness of industry and construction, the main source of value growth in the Polish economy remains service industries, and with the weakness of external demand, GDP growth is based on domestic demand. It is the service sector that will cause that in the second half of 2024 the growth of Polish GDP will approach 4 percent, using, among others, the low base from September 2024, when Poland experienced floods,”
Surprising collapse of construction and assembly production
On Thursday, we also learned data on construction and assembly production, which fell in August by 6.9 percent. per year, i.e. below forecasts at +0.5 percent.after it grew at a rate of 0.6 percent a month earlier.
“All production categories recorded decreases in an annual basis. The worst in infrastructure construction with a decrease of 12.8 percent, which suggests very slow absorption of EU cohesion funds and KPO” – indicate ING economists.
Add that Free implementation of infrastructure projects financed from EU funds, including as part of KPO, translates into muffled activity in engineering work. “We assume that from the pool of almost PLN 100 billion in subsidies from KPO available in 2025-26, most will go to the final beneficiaries only next year. A few months ago we expected a more even schedule between 2025 and 2026”-they admitted.
It turns out that The recession in construction has become extensive, in turn “The availability of EU financing and lower NBP interest rates should work stimulating, but the prospect of a stronger reflection in investments is distributed to 2026”.
