Polish manufacturing PMI reaches highest level since April 2025
The PMI for Polish manufacturing increased to 50.0 pts in October from 49.0 pts in September, coming in above both our forecast (49.5 pts) and the market consensus (49.4 pts). The improvement in the index was driven by higher contributions from 3 of its 5 components: new orders, output and employment. In contrast, contributions from suppliers' delivery times and stocks of purchases weighed on the index. October's reading was the highest since April 2025.
Long-awaited recovery in export orders
The most notable feature of October's PMI survey was the increase in new export orders, recorded for the first time since November 2025. In our view, this partly reflected a low base effect, as surveyed firms reported a sharp decline in export orders in September. The increase was also supported by the ongoing recovery in Eurozone and German manufacturing highlighted in October's PMI report (see MACROmap of 26/10/2026), aided by precautionary inventory accumulation amid persistent supply-chain disruptions originating in the Middle East, growing demand for AI-related technologies and stronger equipment orders linked to rising defence spending. Given the low September base, a more comprehensive assessment of the impact of improving manufacturing activity in the Eurozone and Germany on Polish export orders will be possible after the release of November PMI data. October PMI data also suggests that stronger export orders contributed to a marked slowdown in the decline of total new orders. As a result, the output component of the PMI increased significantly, reaching its highest level since May 2026 and remaining only marginally below the 50-point threshold separating contraction from expansion. As in previous months, the decline in output was mitigated by the completion of backlogged work.
Production cost pressures remain elevated
In October, suppliers' delivery times lengthened at the slowest pace since February 2026, signalling an easing of supply-chain disruptions caused by the conflict in the Middle East. Despite this, surveyed firms continued to report rising production costs, with cost inflation reaching its strongest level since June 2026. According to respondents, the increase was driven by geopolitical tensions, higher commodity and energy prices, as well as rising transportation costs. At the same time, the rate of increase in output prices remained elevated and broadly unchanged from September. This suggests that the conflict in the Middle East continues to exert upward pressure on inflation. Consequently, higher producer prices in manufacturing are likely to contribute to higher core inflation in the coming months.
Numerous signals of moderate optimism in Polish manufacturing
October's PMI survey points to strengthening labour demand in Polish manufacturing. The employment component increased and moved slightly above the 50-point threshold. According to surveyed firms, hiring activity reflected preparations for higher production levels and stronger inflows of new orders. These responses are consistent with firms' assessments of output prospects over the next twelve months. Although the index measuring those expectations declined in October, it remained well above 50 pts and only slightly below the local peak recorded in May. When assessing the outlook for activity, respondents cited expected orders, new customer acquisition, improving market conditions and marketing efforts. Additional evidence of the survey's moderately optimistic tone comes from firms' assessments of inventories. According to the October survey, stocks of inputs increased for the third consecutive month, which may be interpreted as a signal of higher production in the coming months. Respondents' assessments of inventories and expected production levels suggest that the conflict in the Middle East, together with the associated supply-chain disruptions and increased cost pressures, has not materially worsened perceptions of the short-term outlook for manufacturing activity in Poland.
In our view, today's PMI data should be mildly supportive for the PLN and yields on Polish bonds.
