Industrial output in Poland increased by 2,9%y/y in April, slightly above market consensus at 2,8%y/y, after 0,7%y/y in March.
The figures released yesterday do not change the outlook for the Polish economy. Although industrial output dynamics in April accelerated somewhat compared to what was recorded in the previous month, this does not mean that the medium-term prospects for domestic industrial sector have improved. The key factor for industrial output readings in the upcoming months will be the condition of the euro area economy, especially Germany, which is the top destination for Polish exports (with a 26% share of total exports). In addition to the weak zloty, it is the to-date resistance of the German economy to economic slowdown that constitutes a significant support factor for Polish foreign sales, and thereby also for the situation of domestic industry. However, given the low readings of leading indicators for Germany (the PMI index for Germany fell in April to 46,2 points from 48,4 points in March), one might expect that the situation of Polish manufacturing sector could deteriorate again in the coming months.