Industrial production in May stronger than expected
In accordance with data published by Statistics Poland (GUS), the sold production of industry in enterprises employing more than 9 people went up by 4.1% YoY in May, compared with a 3.1% rise in April. Thus, production growth printed ahead of our forecast (3.5%) and market consensus (2.5%). Seasonally-adjusted industrial production expanded by 1.4% MoM in May, which indicates that activity in the industry continues to follow a mild upward trend.
Broad-based industrial production growth
Industrial production growth accelerated in 2 out of 3 main industry segments, i.e. export-oriented sectors (3.7% YoY vs. 2.5% in April) and non-export-oriented sectors unrelated to construction (4.1% vs. 2.6%). Production growth slowed in construction related sectors, to 4.9% YoY vs. 7.6%. The breakdown of data for May suggests that the pickup in industrial activity was broad-based, supported by both external and domestic demand, with the latter benefitting from the inflow of EU funds under the Cohesion Fund and the National Recovery Plan. Furthermore, activity in Polish industry in May was also driven up by the Middle-Eastern conflict. Supply chain disruptions that appeared in the wake of that conflict increased the demand for intermediate goods, their production going up by 7.5% YoY in May vs. 7.3% in April. At the same time, capital goods production growth accelerated to 4.4% YoY vs. 3.0% in April, which suggests that corporate investments continue to pick up in Q2. The pickup is supported by the pressure to modernise and improve efficiency, resulting from growing competition from Asian producers and rising labour, energy and other production costs (see MACROmap of 01/06/2026).
Industrial production data for May released today indicates a slight upside risk to our GDP growth forecast for Q2 2026 (3.0% YoY vs. 3.5% in Q1). In our opinion, the data is positive for the PLN and yields on Polish bonds.
