Weak Sentiment in Industry
The index of economic situation in the Polish industry recorded a very large decline. The sector’s managers’ moods are the worst in two years.
PMI for Polish manufacturing fell by 4 points in May, to 48.5pts, S&P Global said. This is the first time in two years that the index has fallen below 50 pts, the conventional boundary that separates expansion from recession.
The declines were driven by instability and uncertainty over the war and high inflation. Export orders have fallen significantly, which means that demand from our companies’ EU partners is dying out. Above all, however, domestic demand is weaker. Thus, in the near future we can expect worse results of the industry.
Experts point out that the greatest threat to our industry is the recession in Germany. Polish companies are the main suppliers of components to German factories. The weaker economic situation may particularly affect the automotive sector. The market is still struggling with shortages of various elements. Entrepreneurs who supply products to German energy-intensive industries may also suffer.
In Germany the PMI in industry in May went up slightly. However, the indicator was lower for the whole euro zone.