Industrial production rose by 3.1% yoy in April, around 1 pp. below both the market consensus and our own forecast. There is, however, an important mitigating factor that leads us to interpret the release, on balance, as a positive surprise. This relates to a significant revision to the producer price index for industry. Alongside the April data release, Statistics Poland reported that March PPI had in fact been 2 pp. higher than previously stated. Since nominal data are primary ones and not subject to revision, this implies that industrial output as reported, that is in real terms, expanded 2 pp. more slowly in March. In other words, the March reading was not 9.4%, but 7.5% yoy. As readers may recall, the March release posed a genuine puzzle for economists: the figures appeared too strong to be entirely credible, yet our list of one-off factors supporting the March outcome did not include a measurement issue. That was an omission on our part. Had we known that the March production reading was in fact weaker, we would have incorporated this into our forecast. As a result, April’s 3.1% yoy increase in industrial production should not be seen as a negative surprise. It is, rather, a normal reading and should be interpreted as such. Industrial output has remained on a mild upward trend for many quarters.

Industry through the lens of soft and hard data

Source: Statistics Poland, Macrobond, Pekao Research

What lies ahead? In recent months, the outlook for Polish industry has deteriorated. While the domestic drivers of economic growth remain robust and investment-related sectors should continue to expand at a solid pace, exports are likely to suffer from weaker external demand and a slowdown in the global economy following the oil shock. This factor will also weigh on consumer demand in Poland. From another angle, the war in the Gulf is associated primarily with higher production costs, including for liquid fuels, plastics and metals. Although this alters the economic calculus for domestic production vis-à-vis imports of some of these goods, the overall effect on the sector will be negative. Under the current macroeconomic conditions, it will not be possible to pass higher costs fully on to final customers, making some compression of margins and output unavoidable.

Construction output (cumulative change since December of the previous year)

Source: Statistics Poland, Macrobond, Pekao Research

Construction output came in midway between the market consensus and our forecast, rising by 4.5% yoy. Our benchmark for construction activity this year is the trajectory observed in 2010, the last year broadly comparable in terms of weather conditions during the first two months of the year. How does 2026 compare against that backdrop? It looks somewhat less favourable than after the March release: in 2010, output had already returned to the level recorded in December of the previous year, whereas it currently remains around 4% below that mark. This, however, largely reflects the fact that December 2025 was exceptionally strong, far stronger than the rest of 2025. Construction activity has now returned to the average level recorded last year. As for the outlook, we have been constructive on construction output growth for some time and we are not changing that view. Despite difficulties affecting certain segments, including commercial and industrial construction, 2026 should be a year of solid growth in industrial output and investment.

Construction output (2015 = 100)

Source: Statistics Poland, Macrobond, Pekao Research

The April data do not warrant any change to our GDP growth forecast. We continue to expect the Polish economy to expand by 3.5% in 2026, before slowing to 2.7% in the following year.