Industrial production in December increased by 7.3% yoy, crushing expectations (around 3% yoy). The acceleration itself should not come as a surprise, since the calendar configuration in December was favourable (there was one more working day in yoy terms) and previous December was rather weak, creating a low base. Nevertheless, the surprise itself is entirely the result of the strength of industry in December. Stripping seasonal and calendar factors, production rose by 2.1% mom, offsetting the decline from the previous month.

Sold industrial production (index, February 2020 = 100%, s.a.)

Source: GUS, Pekao Analizy

Although December looks phenomenal in itself, this data must be placed in a context that should curb our enthusiasm somewhat. Firstly, industrial production in recent months has shown exceptionally high volatility – after an excellent September, two relatively weak months followed. December can be seen either as a return to trend or a rebound from the weakness in October and November. Secondly, December is quite a specific month – the placement of holidays at the end of the month can have unpredictable and sometimes counter-intuitive effects on output. In December 2025, it was very easy to have a long Christmas break, and it does not appear that this factor negatively affected production volumes. Finally, the surges in production surges occurring twice in second half of the year (September and December) were not associated with a significant improvement in sentiment either domestically or abroad. Nevertheless, the trend in Polish industrial production (and in European production, for that matter) remains positive. It can now be reasonably argued that all three main sources of demand (foreign, domestic consumer, and domestic investment) are moving in the same direction.

Construction results also surprised on the upside, with output rising by 4.5% yoy in December, clearly above forecasts that assumed stagnation (consensus) or a more modest increase (our forecast – 1.6% yoy). Due to technical issues Statistics Poland is experiencing, that is where our knowledge of production ends at the time of writing this commentary. The data published at this stage by GUS is still too general to determine which construction segments and types of investments rebounded at the end of the year, but the rather sluggish recovery in residential construction activity (in contrast to administrative activity – building permits) suggests that broadly defined infrastructure investments are responsible for the improvement. Favorable weather conditions also contributed to the December print – in this respect, January will be much, much worse and the start of construction works this year is expected to be delayed by several weeks due to snow cover persisting throughout the month over much of the country. Nevertheless, 2026 looks set to be a year of investment acceleration and catching up on backlogs. We expect investment growth to be in double digits in the second half of this year.

Housing starts and building permits (thousand units, seasonally adjusted data)

Source: Macrobond, GUS, Pekao Analizy

The data from industry and construction were surprising enough to shift GDP estimates for the end of the year and for the whole of 2025. After today’s data, we can expect economic growth in the fourth quarter to have reached 4% yoy and for the whole of 2025 to have amounted to 3.6%. Given the tendency for preliminary annual GDP data to surprise on the upside, we would not be at all surprised if next Friday GUS announced that the Polish economy grew by 3.7%. This also means that GDP growth forecasts for this year are generally too conservative, and 4% should be considered the base scenario.