Poland Manufacturing Growth Continues In December

(RTTNews) - Poland's manufacturing sector maintained its positive momentum in December, albeit at a slower pace than the previous month, as output and new orders continue to grow solidly, survey data from Markit Economics showed Friday.

The HSBC purchasing managers' index fell slightly to 52.8 in December from 53.2 in November. However, a reading above 50 indicates expansion in the sector. Economists had forecast the index to ease to 53.0.

New orders continued to increase strongly during the month, but the pace of expansion eased slightly. It still remained stronger than the average shown since the survey started in mid-1998. New export orders also rose at a weaker rate from last month.

Manufacturing output increased for third month running in December and the rate of expansion was unchanged from November's eight-month high.

Backlogs of work at firms climbed for the first time since May 2011, reflecting growing pressure on capacity. Manufacturers also raised staffing levels and the rate of job creation was the highest since April.

On the price front, input prices broadly unchanged from the previous month, after rising modestly in four of the five months. Meanwhile, output prices declined for the twenty-fifth consecutive month in December, mainly due to competitive pressures.

"We are cautiously optimistic on the outlook for Poland, and look for growth to consolidate at just over 3% y-o-y in 2015", Agata Urbanska-Giner, economist, Central and Eastern Europe at HSBC, said.

"Weak external demand remains one of the key downside risks. Inflation outlook is set to remain very benign."

HSBC expects the consumer price deflation to last at least until the second quarter of 2015, bringing the central bank under pressure to respond with policy easing.

"But given MPC's recent focus on growth in the short-term we do not expect any rate cuts as long as growth holds up," the economist said.