Industrial production rose by 5.1% yoy, compared with forecasts of 4.5% yoy growth. The surprise is slightly larger because a 0.2 percentage point downward revision of the previous month’s figure lowered the baseline for forecasts. Nevertheless, it is difficult to consider this reading surprising. On a monthly basis, production rose by 0.5% mom (seasonally adjusted), which is another way of saying that we are seeing a continuation of long-term trends. This year’s growth has also been characterized by low volatility. Talking about a recovery in the manufacturing sector is out of date – what we’re seeing is steady expansion.

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

Source: Statistics Poland, Macrobond, Pekao Research

A breakdown into specific industries (double-digit NACE codes) illustrates this well. In July, production slowed sharply in many industries producing for the domestic market (food, chemicals, metals, and metal products), while export-oriented industries (automotive, computer and electronic equipment, and electrical equipment) saw an acceleration. The last of the sectors mentioned above provides an interesting illustration of how economic conditions in the Polish economy have changed in recent months. This sector, accounting for approximately 5% of total industrial production, includes, among other things, electric motors, cables, transformers and lighting apparatus, batteries, and household appliances. After a slump in 2023–24 and stabilization in 2025, 2026 brought a return to solid growth. The combination of very different products in one industry forces us to formulate unverifiable hypotheses, but if cables, motors, and transformers are driving the rebound, then the dominant story is the expansion of the power grid both domestically and globally (in connection with AI-related investments). This is, of course, just an illustration – the entire industry is currently in good shape.

Production of electrical equipment (% yoy)

Source: Statistics Poland, Macrobond

The surprise in the construction sector is significant – this is the second-worst July reading for construction output on record, seasonally adjusted, which is about 10 percentage points (!) below our models’ projections. Construction can, of course, be unpredictable, especially in recent quarters, but perhaps this time we are dealing with a factor unrelated to actual activity on construction sites. According to the Central Statistical Office (GUS), “some companies reported that the settlement of accounts after the completion of work was more irregular than usual for this time of year.” This would suggest that some of the work completed in July was not recorded and that it will be recorded in August. Construction output is based on revenues and any delays will impact measured output. However, the scale and nature of this issue are unknown. For this reason, the July disappointment should be viewed with some caution. We’ll see what August brings.

Construction output (2015 = 100)

Source: Statistics Poland, Macrobond