Poland’s industrial sector has seen tremendous growth over the past decade. In September, manufacturing wages exploded by 8.4% YoY. Beneath the surface, the story is more measured, as different industries are showing opposite patterns across wage and job growth. The National Bank of Poland’s Monetary Policy Council could make more permanent the current pause from further rate cuts in November. This decision further demonstrates their dovish shift toward managing the economy during this period of transition.
In Poland, economic and social policy, as of September, overall wage growth in enterprises amounted to 7.5% YoY. This figure is indicative of a strong growth rate throughout industries. In particular, the manufacturing sector has experienced positive impacts from greater demand. The energy production sector continued to struggle, with just a meager inflation-adjusted wage gain of 2.6% YoY. The climate for the mining industry took a turn for the worse, with the industry recording YoY wage deterioration of 5.1%. Such mixed performance only further undermines confidence that all workers can expect wage gains to continue in the face of so many other economic headwinds.
Poland’s industrial production cranked out a strong figure in September, posting widespread strength in broad-based boom in a variety of manufacturing sectors. The seasonally adjusted industrial production data immediately raised some eyebrows with a phenomenal 4.1% month-over-month growth. This recent advancement speaks to the tremendous resilience of specialized sectors in the industry. Yet even with all these positive indicators, the employment scene is still worrisome, reflected in the ongoing collapse in employment in companies, falling by 0.8% YoY. These numbers indicate deeper, long-term challenges in the labor market that threaten to stifle future industrial expansion.
The long-term outlook for Poland’s labor supply seems equally bleak, underpinned by negative demographic trends. In light of an aging population and lower birth rates, the potential workforce is diminishing, creating obstacles in maintaining industrial production. Faced with these mounting pressures, many production facilities have begun shuttering their doors. What’s more, at least eight producers intend to shut down production for weeks by year end due to weak demand. This forward-thinking strategy is designed to address losses that may be incurred from reduced consumer demand.
Additionally, wage growth in the services sector is starting to slow as well, adding another layer of complexity to the economic picture. The challenges to the auto manufacturing sector are immense. Expect future announcements for plant closures and production pauses to impact operations through the end of 2025. While politically motivated, this decision nonetheless underscores the challenges being experienced by auto producers as they try to navigate new market realities and consumer demands.
As Poland continues to work through these economic changes, it is unclear whether the conditions for continued industrial success will last. Even the National Bank of Poland, despite a hawkish public stance on interest rates, is proceeding cautiously. This may be a sign of lower inflation expectations and overall economic stability. The decision not to commit to any additional rate decreases is a sign of prudence as policymakers evaluate the latest economic data.