The conflict in the Middle East is proving to be a factor boosting activity in Polish industry. The incoming data turned out to be better than economists’ forecasts. „With weaker consumption, the balance shifts towards investments,” comment experts.
Polish industrial production in May was 0.8 percent lower than in April, but year-on-year it increased by 4.1 percent. In both cases, these are results better than forecasts and better than the readings from a month ago.
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Industrial production in Poland in economists’ comments
„One of the sources of the better-than-expected result was mining, where production increased by 32.6 percent year-on-year compared to 21.4 percent year-on-year in April. Production in manufacturing also accelerated, but on a smaller scale — to 2.5 percent year-on-year from 1.6 percent year-on-year. Despite increased volatility in recent months, the average dynamics of industrial production oscillate around 3 percent year-on-year, which is a signal of resilience in the context of global shocks (including the oil shock, Germany’s stagnation, and fierce competition from China),” PKO BP economists comment on the latest GUS data.
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They point out that „the diversification and differentiation of Polish industry is an advantage that protects against stagnation and enables growth at an aggregate level.”
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Economists at Bank Pekao express a similar view on the resilience of the Polish economy to global turbulence. They predict that „this is how it will look this year. With weaker consumption, the balance shifts towards investments.”
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„The structure of industrial production growth in May indicates that the recovery of activity in industry is broad-based, and support for activity in this sector comes from both external and domestic demand, boosted by the inflow of funds from the EU under the Cohesion Fund and the National Recovery Plan,” comments Jakub Borowski, chief economist at Credit Agricole.
Conflict in the Middle East increases activity in Polish industry
He also notes that a factor contributing to increased activity in Polish industry in May was the conflict in the Middle East. „Supply chain disruptions related to this conflict were a factor increasing demand for supply goods, the production of which increased by 7.5 percent year-on-year in May compared to 7.3 percent in April. At the same time, the growth in production of investment goods accelerated (to 4.4 percent year-on-year from 3 percent in April), signaling a continuation of corporate investment recovery in the second quarter,” indicates the CA expert.
He concludes that this recovery is supported by pressure for modernization and increased efficiency, resulting from growing competition from Asian producers and rising costs of labor, energy, and other production costs.
Jakub Borowski estimates that the industrial production data published on Friday signal a slight upward risk for the GDP growth forecast in the second quarter of 2026 (3 percent year-on-year compared to 3.5 percent in the first quarter).
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