According to Statistics Poland (GUS), the sold production of industry in enterprises employing more than nine people went up by 4.3% YoY in August, compared with a 5.1% growth in July. Consequently, production growth came in below our forecast (5.3%) and market consensus (6.1%). Seasonally-adjusted industrial production shrank by 1.2% MoM in August, which indicates that the upward trend in industrial activity lost its momentum.
Marked slowdown in production growth in export-oriented sectors
The slowdown in industrial production growth in August was driven primarily by weaker activity in export-oriented sectors, whose growth slowed to 5.4% YoY from 8.8% in July. Production growth also slowed in non-export-oriented sectors linked to construction (4.6% vs. 6.0%), but accelerated in non-construction-related sectors (3.7% YoY vs. 3.1%). The overall slowdown in industrial production growth between July and August was driven primarily by weaker activity in manufacturing, particularly in such categories as “vehicles, trailers and semi-trailers”, “other transport equipment”, “metal products” and “computers, electronic and optical products”.
August production data consistent with business survey results
The breakdown of industrial production growth data for August is consistent with the August PMI data for Polish manufacturing, which pointed to a further decline in new orders due to weaker demand in key sectors, including construction, as well as competitive pressures from imports from China (see MACROpulse of 01/09/2026). Today’s data also indicates that the factors supporting the recovery in Eurozone manufacturing, including precautionary building of intermediate goods inventories in response to persistent supply chain disruptions linked to the developments in the Middle East, growing demand for AI-related technologies and stronger equipment orders resulting from higher defence spending, have not been clearly reflected in activity growth in Polish manufacturing yet. Furthermore, the August data showed a marked slowdown in capital goods production growth, to 4.7% YoY from 11.1%. Until recently, this category had been supported by both external and domestic demand, including inflows of EU funds under the Cohesion Fund and the National Recovery and Resilience Plan, as well as corporate restructuring processes. This is consistent with our view that the impact of funds flowing into Poland under the National Recovery Plan on corporate investment activity is gradually beginning to fade.
Slight downside risk to our Q3 GDP growth forecast
Today’s data on industrial production in August supports our conclusion that the adverse impact of the conflict in the Middle East on economic conditions in Poland remains limited. The data carries a slight downside risk to our forecast for economic growth in Q3 (3.7% YoY vs. 3.9% in Q2).
In our view, the overall tone of today’s industrial production data is slightly negative for the PLN and the yields on Polish bonds.
