Polish manufacturing PMI dips as new orders fall, outlook weakens

WARSAW (Reuters) - Poland's manufacturing sector saw a renewed contraction in November as new orders fell at their fastest pace in three months, pushing output back into decline, an S&P Global business survey showed on Monday.

The Poland Manufacturing Purchasing Managers' Index (PMI) slipped to 48.9 in November from 49.2 in October, marking the first drop in five months. Any reading below 50 indicates a contraction in activity.

New orders continued their downward trajectory, with the rate of decline accelerating, reflecting ongoing weakness in European demand, particularly from Germany. This downturn, which began in March 2022, is the longest in the survey's history.

"The headline Polish PMI suffered a setback in November as a sharper decline in new orders meant that manufacturers were unable to sustain October's brief increase in output," said Trevor Balchin, Economics Director at S&P Global Market Intelligence.

Despite the challenging environment, employment in the sector rose for the second consecutive month, with the strongest job creation rate since February 2022. Firms are reportedly hiring full-time staff to boost capacity.

Price pressures eased notably, with input prices falling for the sixth time this year and output prices being cut at the sharpest rate since October 2023. Companies cited intense price competition and lower costs for raw materials such as metals and chemicals.

The 12-month outlook for production weakened to its lowest since December 2022, as concerns over the European economy and geopolitical tensions weighed on confidence. However, the PMI trend suggests the sector may be approaching a recovery phase, Balchin noted.

(Reporting by Warsaw bureau; Editing by Toby Chopra)