The mood in the Polish industry worsened again. Decline in orders

The mood in the Polish  industry worsened again. “S&P Global PMI Polish Industrial Sector a complex index reflecting the condition of the industry, calculated on the basis of five sub-indices: new orders, production, employment, delivery time and inventories of purchased items – remained above the neutral threshold of 50 for the twenty-second consecutive month in April. However, it fell from the March level of 52.7 to 52.4, signalling the slowest pace of expansion since the beginning of 2021″, the release reads.

Several problems for the Polish industry

Supply problems remain visible and inflationary pressures are mounting; order portfolios were particularly hard hit, for the second consecutive month.

Forecasts for future production were still very weak against the background of long-term research, and companies continued to increase inventories to counterbalance the risks of supply shortages and continued price increases, S&P Global said.

Orders from international clients have fallen

“Orders from international clients have fallen sharply again, especially those from other EU countries. It has been suggested that the war in neighbouring Ukraine weakened demand and exacerbated supply chain problems and price volatility” , S&P Global reported. The prices of most inputs have risen – especially raw materials, metals and fuels.

“Producers once again, having no choice, raised their own rates. As a result, the prices of finished goods rose for the twentieth month in a row, breaking a new record” is underlined in the report.

“According to the latest PMI data, many problems faced by the Polish industry in March also affected it in April. Supply chain disruptions, rapid price increases and increasing uncertainty over the war in Ukraine continued to affect the sector, although there were signs of some stabilisation: forecasts were still dim but improved slightly since March, production increased slightly and employment continued to increase”  wrote S&P Global economist Paul Smith, quoted in the press release.

According to him, the demand again turned out to be insufficient, both in Poland and among the key export partners in the EU, which can be seen in the decline in orders.

“In addition, raw material shortages continue to limit the sector’s development, and disruptions in the supply chain still keep producers awake at night. As cost inflation does not seem to subside, firms continue to raise their prices to record levels. But they also exacerbate supply and inflationary pressures by trying to mitigate risk through stockpiling”, says Paul Smith.

The value of the index exceeding 50 points means an increase in industrial activity, and below this threshold – a decrease in activity.

Source: 300gospodarka


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