Serious accident in Polish industry. PMI showed economic slump
Nobody expected such weak data. June reading The PMI for the Polish manufacturing sector has indicated a downturn and a return to recession. Time will tell if this is just an “incident at work” or a more permanent decline in production.
The PMI index for the Polish manufacturing sector recorded a very strong decline in June, falling to 44.8 points relative to 47.1 points recorded in May – the analytical company reported S&P Global. This is the lowest reading since October 2023 and the strongest monthly decline in three years.
None of the analysts expected it to be this weak. reading. The market consensus was at 48.0 points. This means that economists generally expected improvement of this indicator after its quite significant deterioration in May . Let us recall, that falling PMI readings below 50 points signal an acceleration in the decline economic activity in the sector under review. The June reading suggests that this decline was particularly severe.
- In June, Polish industry shrank dramatically. The pace the decline in new orders and production accelerated, and manufacturers continued to reduce employment, purchases and stocks. The economic downturn is also reflected in The 12-month production forecast was among the weakest in recent memory pandemic – says the latest report from analytical company S&P Global.
It is difficult to say clearly what was behind such a poor reading. June PMI. The authors of the study point to a deepening decline new orders, which started in April. And that would be the leading clue to President Trump's tariff wars. Except that in the PMI readings for Germany or the entire euro zone in In recent months, there have been no particularly disturbing developments tendencies. In fact, some analysts even claimed that the European industry has shown extraordinary resistance to US tariffs. Perhaps this hypothesis should be will be revised. It is also worth to maintain some restraint in panicking, because one bad data does not make a new trend.
- Although the Polish PMI moved away from the previous month in June, Eurozone Index (flash data: 49.4), recent stabilization of new orders in the manufacturing sector of the Eurozone, and especially in Germany, should in the future provide some support to Polish producers - he wrote in a comment to June data Trevor Balchin, economic director at S&P Global Market Intelligence.
And let us recall that in February, the Polish PMI exceeded the 50-point barrier for the first time in almost three years , which separates recessionary readings from growth readings. It also ended then the longest period of recession in the history of these statistics, which extended from May 2022 to January 2025. Also the reading for March indicated a slight improvement in the economic situation in the manufacturing sector . But that is already history.
- The main PMI indicator, which recorded the highest level in March level for almost three years, recorded the lowest value in 20 years in June months, the biggest decline since mid-2022. Market conditions and business optimism weakened, with rising uncertainty related to the announced tariffs and tensions on the international stage . New orders fell in June for the third month in a row and at the fastest pace from October 2023, prompting companies to reduce production. Subindex production has lost more than nine points in the last two months, which is the biggest decline in three years, Balchin noted.
PMI indicator It shows the condition of the industry and is calculated based on five sub-indices:
- new orders,
- production,
- employment,
- delivery time,
- stock of purchased items.
Decreasing readings below 50 points signal an acceleration in the rate of decline in activity economic. Growing (month by month), but remaining below 50 points, indicate a slowdown in the rate of decline. Only readings above 50 points signal an improvement in the economic situation. This indicator takes values from 0 to 100 points and has been developed since 1998.
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