Poland's business cycle indicator WWK rises by 2.4 pts m/m in May
Poland's leading business cycle indicator WWK, which provides advance information on future trends in the economy, has risen by 2.4 points month on month in May, researcher BIEC reported. According to the experts, the pace of new orders for manufacturing firms remains weak.
Analysts at BIEC noted that the upward trends are consolidating, although the lack of clear improvement in the inflow of new orders to the manufacturing sector and in the labour productivity remain a weak point of the Polish economy, which, as they assessed is directly linked to the low share of investment.
Among the eight components of the indicator, five improved, two remained stable, and one deteriorated.
May showed some breakthrough in new order inflows, mainly driven by foreign markets.
Of 22 industries surveyed by Poland's stats office GUS, two stand out with significantly faster order growth since the start of the year: automotive manufacturing and producers of computer and optical equipment. The clothing and textile industries continue to suffer the most severe downturn, with last month’s signs of recovery attributed only to seasonal Easter effects.
Other sectors showed moderate or highly variable improvements without clear trends. The slight and uneven improvement in new orders translated into somewhat better assessments of financial conditions in manufacturing firms compared to the previous month.
However, according to BIEC experts, "it is still difficult to speak of a breakthrough, as the share of firms reporting worsening financial conditions exceeds those reporting improvement by about 13 percentage points."
Among the barriers limiting development and directly affecting financial conditions, nearly 60 percent of surveyed companies pointed to high and rising labour costs as the main challenge.
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