Industrial production in Poland fails. In August decreased by 1.9% yoy – the Central Statistical Office. This is the first annual decline since May 2013. Everything indicates that the Polish economy is heading towards recession.
Manufacturing heavily disappointing. The biggest setback noted the automotive industry, where there were more than 18-percent decrease. August is always been the worst month for the automotive industry. Few who decides when to buy a new set of wheels. However, the whole year for the automotive industry will be more successful. Sales growth fluctuates around 16% yoy.
Declines were also recorded in the manufacture of beverages (-11.6%) and energy, heating and water supply (-7.2%). Failed as data on the construction industry. Construction and assembly output in August was 5.4% lower than in July and 4.6% lower than last year. The black were the producers of electronics and computers (up 15.4%), furniture (11.2%) and machinery and equipment (4.8%).
The economic situation in no way reflect the GDP growth of 3% . Employment increases slightly, industrial production falls, and entrepreneurs and managers foresee further deterioration, suggesting PMI score below 50 points. Reasons must be sought not only in the Russian-Ukrainian conflict. Firms refrain from investments, despite a record cheap credit in Poland and the EU.
Policymakers very focused on cosmetic changes rather than take decisive and more bold steps, eg. in the area of fiscal stimulus. Instead, it subsidizes sectors of the economy that have problems with a rational allocation of resources. Companies accustomed to the fact that every investment must be guaranteed and co-financed by the state, and this unfortunately requires high taxes. But addiction pay low wage growth and high unemployment (1.8 million Poles appears not registered as unemployed).
Luke Piechowiak
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