Polish industrial output dips slightly in Sept, employment falls
Adds further data, comments
WARSAW, Oct 21 (Reuters) -Polish industrial output declined slightly in September, defying analysts' expectations of modest growth as weak demand in neighbouring Germany continued to weigh.
Industrial output fell 0.3% year-on-year last month. Analysts polled by Reuters had anticipated that output would rise by 0.2% year-on-year.
"Generally we can still assess the situation in industry as stagnation," said Aleksandra Swiatkowska, an economist at BOS. "It's mainly because of weak external demand ... Of course it's connected to the situation in Germany."
Germany, a major partner for Polish companies, sees its economy contracting in 2024 for a second consecutive year.
In other data published on Monday, corporate sector wages rose 10.3% year-on-year in September, below the 11.1% forecast by analysts in a Reuters poll, while corporate employment fell 0.5% year on year.
"The coming months will continue to support the growth of activity in services, while industry and construction remain stagnant. Demand for labour is moderate, which is due to the weakening economic situation and rising labour costs," Polish Economic Institute (PIE) analyst Sebastian Sajnog said in a note.
Producer prices fell 6.3% in September compared with the same month last year, more than the 5.7% decline expected by analysts.
Unlike other central banks in the region, Poland has paused interest rate cuts in the past year, but analysts see it easing in 2025.
"Wage growth is no longer accelerating, but actually slowing down. With the simultaneous decline in employment, there is no fear of excessive demand driving up inflation in the coming months," Bank Pocztowy chief economist Monika Kurtek said.
"This, among other things, may, in my opinion, encourage the central bank to increasingly think about starting about cutting interest rates. I expect the bank's first move at the end of the first quarter of 2025, and at the latest in the second quarter of next year."
Reporting by Alan Charlish and Anna Wlodarczak-Semczuk in Warsaw, Rafal W. Nowak and Mateusz Rabiega in Gdansk; editing by Mark Heinrich and Hugh Lawson
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