Recovery in construction continues
According to data published today by Statistics Poland (GUS), construction and assembly production increased by 3.9% YoY in May, compared with growth of 4.5% in April, coming in markedly below our forecast (6.5%) and market consensus (4.9%). Seasonally adjusted construction and assembly production went up by 0.8% MoM in May, which means that we have now seen an improvement in conditions in the construction sector for the third month running. Still, seasonally adjusted production remained 1.7% below the local peak recorded in December 2025.
The slowdown in construction and assembly production growth resulted from a decline in the growth rate in the “civil engineering works” category (-1.8% in May vs. 4.0% in April). In the remaining two categories, production growth accelerated: in “specialised construction activities”, it stood at 10.8% YoY in May vs. 4.6% in April, while in “construction of buildings”, it went up to 5.8% YoY, from 5.2%. We expect construction and assembly production to continue its upward trend in the coming months (see MACROmap of 27/04/2026), supported by increasing absorption of EU funds, with peak utilisation expected in 2026. Support for this scenario comes from the rise recorded in June in assessments by construction companies surveyed by GUS of their expected domestic order books, which reached their highest level since February 2020.
Further increase in retail trade activity
Nominal retail sales growth in enterprises with more than 9 employees increased to 4.4% YoY in May, from 2.8% in April, coming in below the market consensus (5.3%) and our forecast (5.2%). Growth in retail sales at constant prices went up to 3.0% YoY in May, from 1.3% in April, and was slightly below our forecast (3.1%) and market consensus (3.6%). Seasonally adjusted retail sales at constant prices increased by 0.4% MoM in May.
The main factor limiting retail sales growth in May was a deceleration in sales growth in the “solid, liquid, and gaseous fuels” category (9.9% YoY in May vs. 25.6% in April). In our view, this may have been related to households travelling by car less during the May long weekend. This was supported by a less favourable calendar of public holidays than a year earlier, which limited opportunities to extend weekends. In addition, low willingness to travel may have been exacerbated by high fuel prices related, among other factors, to persistent geopolitical tensions in the Middle East. At the same time, all other categories reported by GUS saw an increase in annual growth of sales at constant prices, confirming that consumer demand remains strong. This assessment is also reflected in consumer confidence indicators relating to current and expected “major purchases”, which remained at relatively high levels in May and June.
Higher wages in mining boosted earnings growth
According to the GUS data published today, the employment growth rate in the enterprise sector remained stable between April and May, standing at -0.9% YoY, in line with our forecast, which was equal to market consensus. The result is consistent with our assessment that the annual decline in employment seen in the enterprise sector since Q4 2023 is largely related to employees reaching retirement age. At the same time, nominal wage growth in enterprises employing more than 9 people went up from 5.4% YoY in April to 5.8% YoY in May, coming in slightly below our forecast, which was consistent with market consensus (6.0%). The acceleration in wage growth in May resulted mainly from shifts in the timing of payments of variable remuneration components in mining, which led to wage growth in this category increasing from -11.0% YoY in April to +2.3% in May. Faster nominal wage growth and a slight decline in inflation (see MACROpulse of 15/06/2026) contributed to an increase in real wage growth to 2.6% YoY in May vs. 2.1% in April. As a result, real wage fund growth went up to 1.7% YoY in May, compared with 1.1% in April and 2.9% in Q1. This supports our forecast that consumption growth will slow from 3.3% in Q1 to 2.5% in Q2.
2026 economic growth forecast remains unchanged
Today’s data on construction and assembly production, retail sales, and wages and employment in the enterprise sector for May, combined with Friday’s data on May industrial production, indicate that the conflict in the Middle East has had a limited negative impact on economic conditions in Poland so far. Today’s data support our forecast of average annual GDP growth for 2026 (3.3%).
We believe that the overall tone of today’s data from the Polish economy is neutral for the PLN exchange rate and yields on Polish bonds.
