
Industrial production markedly below expectations
In accordance with the GUS data, the volume of sold production in enterprises employing more than 9 people increased by 0.2% YoY vs. a 1.3% drop in November (upward revision from -1.5%), which was markedly below the market consensus (1.8%) and our forecast (3.0%). Industrial production growth between November and December was largely driven up by the statistical effect of a favourable difference in the number of working days (in December 2024, there was one day more than in the previous year, while in November 2024, there were two days less than in November 2023). Seasonally-adjusted industrial production shrank by 1.1% MoM in December.
Export-oriented branches with negative figures again
Favourable calendar effects translated into annual industrial production growth in 2 out of 3 main segments of the industry, i.e. export-oriented branches (-4.4% YoY in December vs. -5.8% in November) and other categories (2.5% vs. 0.4%), though in construction-related sectors, the growth slowed from 1.2% to -0.2%. The drop resulted from a decline in the production of metal products from -0.9% YoY in November to -3.3% in December. Nonetheless, taking into consideration the data for the preceding months, the acceleration of production decline in December does not imply a lasting deterioration of outlook for this category in our view. Particularly noteworthy about the data is the continuing, relatively strong production slowdown in export-oriented branches. In our opinion, short-term growth prospects remain unfavourable, primarily due to a subdued activity in the manufacturing sector in the Eurozone, including Germany, which translates into a reduced demand for intermediate goods manufactured in Poland, as suggested by the PMI readings released over the last couple of months (see MACROmap of 23/12/2024). Consequently, the release of January’s preliminary PMIs for the key Eurozone economies scheduled for Friday will be of importance in this context.
Restructuring processes in industrial manufacturing not over yet
In accordance with the GUS data published today, the employment growth rate for the enterprise sector fell from -0.5% YoY in November to -0.6% in December, printing below the market consensus (-0.5) and our forecast (the same as consensus). In month-on-month terms, the number of the employed people went down by 9.0k in December (the strongest drop for a December since 2013). Employment figures were driven down primarily by layoffs in the manufacturing sector, down by 9.8k FTEs comparing to November. The data is actually somewhat surprising given the recent PMI business sentiment survey results, which showed that December had been the third month running to see the employment grow in the manufacturing sector (see MACROpulse of 02/01/2025). In our view, it suggests that the restructuring processes started a couple of quarters ago in the Polish manufacturing sector are not over yet. At the same time, in light of today’s data, we stand by our opinion that a scenario in which employment in the enterprise sector were to plummet in the coming months is unlikely.
Elevated wage pressures persist
Nominal wage growth in enterprises employing more than 9 people fell from 10.5% YoY in November to 9.8% in December, printing markedly below the market consensus (11.3%) and our forecast (12.9%). This somewhat surprising data is probably due to the shift of dates when bonuses and rewards in the mining sector were paid out in December 2023 and 2024 (nominal wage growth in the mining sector dropped from 10.0% YoY in November to 3.2% in December). In real terms, wage growth in companies slowed from 5.6% YoY in November to 4.9% in December. It is worth noting that in both November and December nominal wages grew at more than 10% YoY in most categories named by the GUS. Consequently, today’s data implies that the elevated wage pressures still persist in the Polish business sector.
Consumption accelerated in Q4
December saw a decline in the real growth rate of the wage fund in the enterprise sector (calculated as the product of employment and the average wage adjusted for price changes) to 4.2% YoY vs. 5.1% in November. In Q4, the real wage fund growth slowed to 4.6% YoY, from 5.5% in Q3. Today’s data has no impact on our annual consumption growth acceleration scenario for Q4, though (2.5% YoY vs. 0.3% in Q3). It will be possible to assess private consumption trends more precisely after tomorrow’s release of retail sales data for December.
Economic growth slowed in Q4
Today’s data underpins our forecast of continuing slowdown of economic growth in Q4 (2.5% YoY vs. 2.7% in Q3). 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.