Continued upward trend in industrial activity
According to Statistics Poland (GUS), sold industrial production in enterprises employing more than nine people increased by 5.1% YoY in July, compared with growth of 7.4% in June. Consequently, production growth came in below our forecast (6.0%) but above the market consensus (4.8%). The slowdown in industrial activity growth was driven by the statistical effect of an unfavourable difference in the number of working days, with July 2026 having the same number of working days as July 2025, compared with one additional working day in June 2026 relative to June 2025. Seasonally adjusted industrial production expanded by 0.5% MoM in July, which indicates that industrial activity continued its upward trend.
Data point to an investment recovery
Despite the adverse calendar effects, industrial production growth in export-oriented sectors accelerated to 8.8% YoY in July from 6.5% in June. This was driven primarily by stronger output growth in the motor vehicles, trailers and semi-trailers industry. The result may have been supported by a shift in the timing of the summer shutdown in automotive plants compared with 2025. In contrast, growth slowed in non-export sectors unrelated to construction (3.1% YoY vs. 7.9% in June) and in construction-related industries (6.0% vs. 9.4%). The breakdown of industrial production growth in July points to a continued broad-based recovery in industrial activity. The growth is being supported by both external and domestic demand, with the latter increasingly driven by inflows of EU funds under the Cohesion Fund and the National Recovery Plan. The July production data also provide further evidence of a strengthening investment recovery, as indicated by a further acceleration in capital goods production growth (to 11.1% YoY in July vs. 7.3% in June, the highest reading since December 2025). This recovery continues to be driven by firms’ growing need to modernise and improve efficiency in response to intensifying competition from Asian producers and rising costs of labour, energy and other factors of production.
Sharp but temporary decline in construction activity
According to data released today by Statistics Poland, construction and assembly production shrank by 2.4% YoY in July, compared with growth of 5.2% in June, coming in markedly below our forecast (4.0%) and the market consensus (4.2%). The decline in construction and assembly production growth in July was driven by the unfavourable working-day effect mentioned above. In July, seasonally adjusted construction and assembly production shrank by 3.8% MoM.
The decline in overall construction and assembly production growth was driven primarily by the civil engineering works category, which contributed 7.9 pp to the decline. Output in this category declined by 0.2% YoY in July, compared with growth of 18.7% in June. Changes in the remaining two categories, i.e. specialised construction activities (-6.4% YoY in July vs. -5.7% in June) and construction of buildings (-1.8% vs. -3.0%), had only a limited impact on overall construction activity. It is worth noting that, according to the GUS release, a more irregular than usual pattern of settlements following the completion of works contributed to the decline in production and may have shifted reported output between months. This suggests that the July decline was most likely partly temporary and that construction and assembly production is highly likely to rebound in August. This is consistent with our view that construction and assembly production will continue its upward trend in the coming months, supported by ongoing absorption of EU funds, which we expect to peak in 2026.
Acceleration in wage growth concentrated in mining and energy sectors
According to GUS data published today, enterprise-sector employment growth edged up to -0.8% YoY in July from -0.9% in June, in line with our forecast but above the market consensus of -0.9%. The slower pace of decline reflected a low-base effect from a year earlier, as July 2025 was the first July since 2012 to record a MoM decline in employment. The result is consistent with our assessment that the annual decline in enterprise-sector employment since Q4 2023 largely results from employees reaching retirement age. Nominal wage growth in enterprises employing more than nine people rose from 5.9% YoY in June to 6.8% in July, coming in above our forecast (6.5%) and the market consensus (6.2%). Although the acceleration in wage growth was broad-based, it was particularly pronounced in mining (21.9% YoY in July vs. 2.4% in June) and energy (13.4% vs. 2.4%) sectors. Together, these two sectors accounted for 0.7 pp of the acceleration in wage growth between June and July. The increase most likely reflected a shift in the timing of bonus and award payments and, as this effect fades in August, we expect overall wage growth to slow. Nonetheless, today’s data confirm that moderate wage pressures persist in the enterprise sector. Despite higher inflation (see MACROpulse of 13/08/2026), the sharper acceleration in nominal wage growth lifted real wage growth to 3.7% YoY in July from 3.3% in June. As a result, real wage bill growth accelerated to 2.8% YoY in July, from 2.3% in June and 1.7% in Q2. This supports our forecast of a recovery in consumption growth from 2.0% in Q2 to 2.3% in Q3.
Moderate economic growth in Q3
The July data on industrial production, construction and assembly production as well as wages and employment in the enterprise sector released today support our forecast of a modest slowdown in economic growth in Q3 (3.3% YoY compared with 3.8% in Q2). A more comprehensive assessment of the economic growth outlook will be possible once the breakdown of Q2 GDP growth is released at the end of August. Today’s data support our previous assessment that the adverse impact of the conflict in the Middle East on economic conditions in Poland remains limited.
We believe that the overall tone of today’s data from the Polish economy is neutral for the PLN exchange rate and Polish government bond yields.
