Production ahead of expectations, wage growth slows

Another month with positive data from the industry

In accordance with the GUS’ updates, the volume of sold production in enterprises employing more than 9 people increased by 3.2% YoY in October vs. 7.6% in September (upward revision from 7.4%), coming in above the market consensus (2.5%) and our forecast (1.8%). It is worth noting that this result was achieved in spite of the impact of high base effects and unfavourable difference in the number of working days (in September 2025, there was 1 working day more than in September 2024, while in October, the number of working days was the same for 2024 and 2025). In October 2025, seasonally-adjusted industrial production shrank by 1.0% MoM.

Production of industrial goods keeps growing quickly

Due to unfavourable calendar effects, industrial production growth slowed in all three main industrial segments, i.e. export-oriented sectors (2.2% YoY in October vs. 8.8% in September), construction-related sectors (5.3% vs. 10.5%) and other sectors (3.3% vs. 6.0%). What is also worth noting is the continued (since March 2025) growth in capital goods production (9.2% YoY in October vs. 16.0% in September). In our view, it mainly stems from the enterprises making investments focused on restructuring and improving efficiency. This is consistent with our forecast for total investments, which are projected to rise by 5.0% in 2025 and 7.9% in 2026, following a 0.9% drop in 2024.

Construction sector activity intensifies

Construction and assembly production growth improved from 0.2% YoY in September to 4.1% in October, printing markedly ahead of market consensus (2.2%) and our forecast (1.0%). Last year’s low base effect was an important factor behind construction and assembly production growth, as it offset the negative impact of the calendar effects mentioned above. In October, seasonally-adjusted construction and assembly production expanded by 2.3% MoM, indicating that the activity in the construction sector has intensified, though it is still low in comparison with 2022-2023, the period marked by the completion of investments financed under the previous EU long-term budget (2014-2020).

Construction and assembly production growth slowed in “specialised construction activities” (7.8% YoY in October vs. 10.7% in September) category. At the same time, in spite of the impact of unfavourable calendar effects, growth in the “civil engineering works” (3.2% in October vs. -3.0% YoY in September) and “construction of buildings” (2.4% vs. -3.8%) has accelerated. Construction and assembly production data breakdown indicates that public investments in infrastructure were the main driver of production growth in October. This underpins our scenario, in which the cumulation of EU funds that Poland is receiving under the National Recovery Plan and Multi-Annual Financial Framework for 2021-2027 will be boosting the activity in the construction sector in the quarters to come. Public investments in infrastructure will be the main driver of construction and assembly production growth, which will also be boosted by housing investments (see MACROmap of 06/10/2025). However, given the low level of utilisation of production capacities, the role of companies’ investments as a factor improving the activity in the construction sector will remain limited.

Employment decline concentrated in the manufacturing sector

In accordance with the GUS data published today, the employment growth rate in the enterprise sector remained stable between September and October, standing at -0.8% YoY, and aligning with market consensus and our forecast. In monthly terms, the number of employed in October fell by 5.4k. Employment decline was concentrated in two categories: “manufacturing” (-2.9k) and “accommodation and food service activities” (-1.2k). Employment in the Polish business sector is curbed by unfavourable supply factors related to the shrinking workforce, with baby boomers reaching the retirement age (see MACROmaps of 17/11/2025 & 24/11/2025). We anticipate that the downward trend in employment seen over the last couple of quarters in the business sector will continue in the months to come.

Marked slowdown of wage growth

Nominal wage growth in enterprises employing more than 9 people fell from 7.5% YoY in September to 6.6% in October, printing markedly below the market consensus (7.2%) and our forecast (7.4%). The slowdown resulted nearly entirely from wage growth slowdown in the “transport and warehousing management” category (2.4% YoY in October vs. 8.7% in September), which drove the total wage growth down by approx. 0.6 pp. Slower growth in wages is most likely connected with poor financial standing (high level of debt, d a declining number of shipments and high operating costs) in transportation and logistics sector, which means that it could be long-lasting.

In real terms, wage growth in companies slowed from 4.5% YoY in September to 3.7% in October. Consequently, real wage fund growth slowed down to 2.8% YoY in October, from 3.6% in September and 3.4% on average in Q3, which underpins our forecast saying that consumption growth slowed from 4.0% YoY in Q3 to 3.5% in Q4.

Our GDP growth forecast remains unchanged

Today’s data on industrial production, construction and assembly production, and wages and employment in the enterprise sector for October do not change our economic growth forecast for Q4 (3.8% YoY vs. 3.7% in Q3) and 2025 (3.6% vs. 3.0% in 2024). We believe that the overall tone of today’s data from the Polish economy is slightly positive for the PLN and the yields on Polish bonds.