Poland's manufacturing PMI falls in December but outlook improves

WARSAW (Reuters) - Poland's manufacturing sector saw a further decline in December, with the Purchasing Managers' Index (PMI) dropping to 48.2 from 48.9 in November, marking the strongest deterioration since August, S&P Global reported on Thursday.

Analysts polled by Reuters had expected a reading of 48.6. A reading below 50 indicates a contraction in activity, while above 50 signals growth.

However, there were signs of potential recovery as new orders contracted at the slowest pace in more than a year.

The downturn was driven by steeper declines in output and stocks of purchases, despite a sustained rise in employment and a slower decline in new orders.

"A glance at the headline figure would show a worsening downturn... but closer inspection of the sub-indices provides some cause for optimism moving into 2025," said Trevor Balchin, Economics Director at S&P Global Market Intelligence.

Domestic demand showed signs of recovery, although exports remained weak, particularly to Germany. New export orders fell at the fastest rate in three months.

Despite the contraction in output, which fell at the steepest rate since August, firms are optimistic about 2025, expecting economic recovery, export growth, and new client acquisitions.

Employment in the manufacturing sector grew for the third consecutive month, albeit at a slower pace than in November.

Meanwhile, price pressures remained weak, with input prices falling for the seventh time in 2024, and output prices also declining.

The PMI trended at 48.8 over the fourth quarter, the highest quarterly average since early 2022, and Poland outperformed the euro zone, which averaged 48.3.

(Reporting by Reuters)