Tuesday, June 1, 2021

Poland: Industry flooded with orders. Factories can't keep up

 Orders for Polish industrial products increased most in May in over three years. However, companies have difficulties with their implementation. This heralds a continuation of investment recovery, but also price increases.

In May, according to IHS Markit, Purchasing Managers' Index (PMI) rose to a record level of 57.2 points from 53.7 points in April. The May increase by 3.5 points was one of the largest in the history of Polish PMI, going back to 1998.

Any result over 50 points theoretically means that the situation in the industry is improving month to month. The distance from this limit can be interpreted as a measure of the pace of this improvement. In this light, in May, the Polish industry developed the fastest in over 20 years.

Delays in component deliveries are currently the biggest problem for Polish producers. In May, they increased the most in the history of the study. As a result, the production backlog of enterprises increased again, although slightly lesser than in April.

To meet growing demand, the companies increased their component orders and employment. However, they will also have to increase production capacity, and that means new investments.