FX.co ★ Polish Manufacturing Downturn Slightly Softens

Poland's Manufacturing PMI by S&P Global increased slightly to 48.8 in January, up from 48.5 in December, yet still fell below the forecast of 49, remaining in contraction territory for the ninth consecutive month. This points to a continued downturn, albeit at a slower pace. Both output and new orders saw declines, though at reduced rates, and export demand dipped only slightly despite persistent weaknesses in German markets. Notably, backlogs of work rose for only the third time in nearly four years, which spurred a resurgence in purchasing activities, marking the most significant rise in input stocks since mid-2022. Nonetheless, employment saw a faster decline. In terms of pricing, input costs experienced a modest rise for the third month in a row, in line with subdued inflationary pressures, while output prices witnessed a slight increase. Business confidence saw a marked improvement, with expectations for output reaching their highest level since June 2021, driven by hopes of a recovery in demand, along with potential investment and new market opportunities.