Industrial production recorded an unexpected growth in October by 3.2% yoy (and 1.1% yoy SA), compared with the consensus forecast of 2.4%. Nothing suggested that, following the exceptionally strong September reading, the momentum in domestic manufacturing would continue. A reader might ask: “What momentum? October brought a collapse in the growth rate from 7.6% to a meagre 3%!” Our answer could simply be to remain silent and show the chart below.

Industrial production (February 2020 = 100%, s.a.)

Source: GUS, Macrobond, Pekao Research

Nonetheless, we owe our readers a few explanations. The October surprise can be summarised as follows: September was so strong for Polish industry that October had little chance of matching it or even growing at all. Why?

First, September generated a significant high-base effect, largely driven by the return to “normal” production activity after summer shutdowns in some industries (notably automotive). The unwinding of that factor turned out to be relatively minor when set against broadly based output gains across other categories (transport equipment, chemicals, pharmaceuticals).

Second, the working-day pattern supported production in September (+1 working day yoy) but weighed on it in October (no working-day advantage).

Third, October 2024 was an exceptionally strong month for Polish industry, creating a relatively high base that was unlikely to be exceeded. At the same time, recalling the reading from a year ago brings a sense of déjà vu: October last year also delivered a surprisingly broad-based rebound in manufacturing. It raised hopes for an acceleration in the sector’s recovery—hopes that were quickly dashed by the weak November 2024 reading. This year, however, the situation appears somewhat different. Industry has surprised markedly on the upside for two consecutive months, something rarely seen in the stagnation years of the recent past. We do not want to prematurely declare a “resurrection” of domestic industry, but we would venture to say that it is closer today than at any point in the past three years.

A second consecutive upside surprise in Polish manufacturing bodes well for the remainder of the year. It also reinforces the modest upward trend observed in the sector over recent quarters, driven primarily by solid domestic consumption and a strengthening investment rebound. The only missing component in this picture is a meaningful revival in external demand—although the first signs of such a recovery are visible in the detailed manufacturing data from the past two months. Nevertheless, the outlook for Poland’s industrial sector is becoming increasingly favourable, and we may indeed be witnessing the early stages of a long-awaited upswing.