The PMI for Poland’s manufacturing sector dropped to 48.3 points in March after a slight recovery in February. For the eleventh month in a row, the index remains below the neutral 50-point level.
The companies that were surveyed reported a lack of demand for their products both in Poland and on foreign markets. The decline in demand is accompanied by a decrease in purchasing activity by manufacturers and decreased willingness to hire new employees.
The weakening of the German manufacturing sector is an alarming signal for the Polish industry: the western neighbor is Poland’s largest trading partner. In March, the PMI for German industry dropped significantly to 44.7 points compared to 46.3 points in February.
The German industry is struggling with the same problems as the Polish industry. The low level of new orders is of particular concern, driven by low demand and influenced by poor consumer sentiment, the high cost of living, and credits.
The decline in inflation had no effect on the sentiment of the German manufacturers. Their expectations for the future were worse than in previous surveys. Entrepreneurs along the Oder and Rhine are primarily concerned about low demand, geopolitical uncertainty, high inflation, and the tightening of monetary policy.
On average, the PMI in the euro area dropped from 48.5 points in February to 47.4 points in March.