We expected a weak industrial output reading in November due to the specific calendar and public holidays, but reality surprised even the most pessimistic forecasters. Industrial production fell by 1.1% yoy in November, compared to our expectations of a 0.5% increase and the consensus forecast of 2.9%. It's difficult to clearly assess the impact of the unfavorable calendar, but this hypothesis is supported by the broad-based decline in sold production year-on-year – the share of industrial sectors experiencing a year-on-year drop was nearly 50%. The largest declines were recorded in clothing (-17% yoy), electrical appliances (-7.6%) and furniture (-7.3%).

However, a broader look at the seasonally adjusted medium-term data suggests that the weak November is more likely a consequence of a very strong September and October and is not a cause for major concern. The situation in construction is similar; after a surprisingly good reading in October, November fell short of expectations, growing by only 0.1% yoy.

Industrial and construction output index (January 2020 = 100%, seasonally adjusted)

Source: Statistics Poland, Pekao Research

Nevertheless, after a very good start to the fourth quarter, November brought a slight cooling, which may pose a risk to our forecast of accelerated GDP growth at the end of the year, although much data remains to be seen.

At the same time, the Central Statistical Office released November labour market data. Wages in the corporate sector delivered a long-unseen upward surprise – they rose by 7.1% yoy in November, compared to 6.6% in the previous month and expectations of close to 6%. This allowed the medium-term wage momentum to rebound back towards 8%.

Annualized wage momentum in the corporate sector (%, seasonally adjusted)

Source: Statistics Poland, Pekao Research

Interestingly, the entire November wage acceleration was concentrated primarily in a single category: transportation and storage. We haven't yet seen a deeper explanation for this phenomenon, but it allows us to treat November's higher wage growth as a one-off "accident" – in the following months, it will return to lower levels closer to 6%. On the other hand, real wage growth anchored for a longer period at around 4% – a level similar to productivity growth in the Polish economy and not generating excessive inflationary pressure.

Sectoral contribution to the change in annual wage growth in November (percentage points)

Source: Statistics Poland, Pekao Research

Employment in the corporate sector also performed positively in November, increasing by 9k compared to the previous month, above the seasonal pattern. Year-on-year, it remained at -0.8%. However, the medium-term trend does not look like so promising – employment in the corporate sector has been steadily declining since 2023.

Employment in the corporate sector (thousands)

Source: Statistics Poland, Pekao Research