July did not bring about any significant change in business conditions in the manufacturing sector. The IRG SGH industrial confidence indicator (ICI) rose by 2.0 points month-over-month, reaching 1.6 pts, the same level as in May. The increase in the ICI in July resulted from a rise in domestic orders and improved forecasts regarding production volumes in the coming months.
Changes in the net balances of responses to individual survey questions are mixed, clearly indicating a lack of signs of a sustained economic recovery. Production volumes and foreign orders declined. The financial situation of manufacturers also deteriorated. Inventories of finished goods have risen. At the same time, employment has increased, and, according to respondents, the overall situation in the Polish economy has improved. Producer prices have fallen slightly. However, all these changes are minor and, like the confidence indicator, do not indicate a trend toward stable improvement or deterioration. It is worth noting the declining capacity utilization rate for another consecutive quarter; this time by 5.1 percentage points. Survey participants anticipate a further decline. This is the only concerning signal emerging from the July business climate survey in the manufacturing sector. Overall, respondents’ forecasts are optimistic.
Researcher:
Konrad Walczyk, kwalcz1@sgh.waw.pl