Severe frost in January weighed on activity in industry and construction sector
A sharp decline in industrial production growth
In accordance with data published by Statistics Poland (GUS), the volume of industrial production sold by enterprises employing more than 9 people contracted by 1.5% YoY in January vs. a 7.3% growth in December, coming in well below the market consensus (2.0%) and our forecast (3.0%). A key factor driving down annual industrial production growth between December and January was the statistical effect of an unfavourable difference in the number of working days (in December 2025, the number of working days was the same as in December 2024, while in January 2026 there was one working day less than in January 2025). Seasonally-adjusted industrial production shrank by 2.4% MoM in January. As a result, the level of industrial production in January was the lowest since August 2025.
Significant decline in production in construction-related sectors
Industrial production growth slowed across all three main industrial segments: export-oriented sectors (0.7% YoY in January vs. 7.4% in December), construction-related sectors (-10.0% vs. 18.9%) and other sectors (-1.1% vs. 5.5%). The decline in production growth in export-oriented sectors was much more severe than the aforementioned unfavorable calendar effects would suggest. In our opinion, however, this decline was short-lived, and in the coming months, sectors with a high share of exports in their sales will be supported by the expected recovery in German industry, backed by a significant fiscal package launched in Germany. The high probability of this scenario is signalled by the sustained growth in new orders in German manufacturing in recent months (see MACROmap of 09/02/2026). On the other hand, the sharp decline in production growth in construction-related sectors , i.e., “other non-metallic mineral products” (-17.0% YoY in January compared to 16.8% in December) and “fabricated metal products, except machinery and equipment”” (-6.6% compared to 19.9%), was, in our opinion, largely caused by unfavorable weather conditions, which led to a temporary decline in construction activity (see below). We estimate that the decline in production growth in construction-related sectors contributed to a 2.8 pp decrease in annual industrial production growth. Also worth noting is the continued (since March 2025) growth in capital goods production (5.9% YoY in January vs. 17.1% in December). This signals an increase in investment activity by companies focused primarily on improving efficiency. This assessment is supported by the moderate recovery in lending in the corporate investment loan segment in recent months and the strong growth in the estimated value of investment projects already underway.
Severe frost in January weighed on activity in industry and construction sector
Construction and assembly production declined by 12.8% YoY in January, compared to a 4.5% growth in December, coming in below the market consensus (-4.0% YoY) and our forecast (-7.0%). The factors contributing to the sharp decline in construction and assembly production growth were the above-mentioned statistical effect related to the unfavourable difference in the number of working days and adverse weather conditions recorded in January. According to the Institute of Meteorology and Water Management (IMGW), the average temperature in January was -4.1°C, significantly below the long-term average. As a result, in many regions of Poland, the number of days with temperatures below the minimum level required for construction work was relatively high compared to recent years. Seasonally-adjusted construction and assembly production shrank by 8.9% MoM in January. Due to the strong combined impact of the above factors, construction and assembly production growth declined substantially in the “specialised construction activities” (-11.9% YoY in January vs. 23.0% in December) and “construction of buildings” (-18.4% vs. 13.3%) categories. In the “civil engineering works” category, the decline in growth was rather insignificant (-7.5% vs. -7.2%), although according to Statistics Poland civil engineering works (including roads and bridges) are most dependent on weather conditions. This production breakdown therefore suggests that adverse weather conditions had a relatively strong negative impact on housing construction. We expect construction and assembly production to return to an upward trend in February, supported by the growing use of EU funds flowing into Poland under the National Recovery Plan and the Multiannual Financial Framework 2021-2027, which will peak in 2026. (see MACROmap of 19/01/2026). This scenario is supported by a marked improvement in recent months in the assessments of construction companies surveyed by Statistics Poland regarding their current portfolio of domestic orders and expected employment.
Annual employment data revision had no significant impact on employment growth
In accordance with the GUS data published today, the employment growth rate for the enterprise sector fell from -0.7% YoY in December to -0.8% in January, below the market consensus and our forecast (-0.7%). Employment fell by 9.8k MoM in January, marking the weakest January result since 2021, when employment was under a strong, negative influence of the COVID-19 pandemic. Employment data for January was significantly affected by the annual revision of data on employment in micro-enterprises (enterprises with up to 9 employees). In January, companies whose headcount in the preceding year increased above 9 were reclassified to the group of enterprises employing at least 10 persons, and as such were included in the population surveyed by the GUS, while companies, whose headcount fell below 10, were subsequently removed from that group. Employment decline in the enterprise sector, which continued throughout 2025, and resulted primarily from employees reaching retirement age is most likely to have been the reason behind such substantial employment decline in January. Due to the abovementioned change in the population of companies surveyed by the GUS, comparing the annual growth rate of employment between December and January and, consequently, also the growth rate of the wage fund (essential to making conclusions about household consumer spending) is not justified. A more comprehensive assessment of employment and wage fund trends will be possible following the release of data for February 2025.
Slowest wage growth in manufacturing since February 2021
Nominal wage growth in enterprises employing more than 9 people fell from 8.6% YoY in December to 6.1% in January, printing markedly below the market consensus (7.3%) and our forecast (7.7%). Wage growth slowdown in January resulted from a less marked growth of annual minimum wage compared with the previous year, which led to an approx. 0.7 pp. decline in annual wage growth rate in the enterprise sector between December and January in accordance with our estimates. In real terms, wage growth in companies slowed from 6.1% YoY in December to 3.8% in January, which is consistent with our scenario of consumption growth slowdown, from 4.2% YoY in Q4 2025 to 3.2% in Q1 2026. Notably, in January, nominal wage growth slowed substantially in most of the reported categories. In manufacturing, it slowed from 8.8% YoY in December to 5.9% in January, which was the lowest reading since February 2021. The data indicates that wage pressures in the enterprise sector are easing.
Easing wage pressures of key importance for interest rate outlook
Today’s data on industrial production, construction and assembly production, and wages and employment in the enterprise sector in January carry a downside risk to our economic growth forecast for Q1 (3.9% YoY vs. 4.0% in Q4). We will be able to assess this risk more precisely when the data on economic activity in February is published. In our view, the data for February will be consistent with our conclusion that the strong production growth slowdown in export-oriented branches and the construction sector in January was transitional. In our view, the Monetary Policy Council will have a similar viewpoint on the January data, seeing it predominantly as a signal of easing wage pressures. Consequently, today’s data underpin our scenario in which the MPC will cut interest rates by 0.25 pp. in its meeting in March.
We believe that the overall tone of today’s data from Polish economy is slightly negative for the PLN and the yields on Polish bonds.