Analysts Point To Impact Of Minimum Wage Hike, Employment Clouded By Sample Adjustment

Below we summarise snap reactions of local sell-side desks to Polish wage, employment, industrial output and PPI data for the month of January:

• ING observe that December's wage growth was slower due to the advance payment of bonuses in the mining sector, but the January outturn was very strong. Meanwhile, a difficult situation in the furniture industry and worsening situation in textiles is weighing on employment. Industrial output was boosted by "calendar effects" and some green shoots are emerging, which they expect to continue in the coming months.
• mBank write that wage growth was even stronger than expected. Employment data was not particularly surprising - but forecasting in January is obstructed by the change of the sample. They note that real wage growth has topped +8% Y/Y, which is the most since early 2019 and will support household consumption. They do not see any turning points in the industrial output trend, but expect the picture to improve eventually.
• Pekao note that January wasn't great for industrial production, which has been stagnant over the past two years. They take employment data with a pinch of salt, due to seasonal sample adjustments by the statistics bureau. Factory-gate prices fell at the fastest pace in history, which they link with zloty appreciation. Wages were very strong, which in Pekao's view stemmed from larger-than-expected bonus payments in January and an unprecedented minimum wage hike.
  
• The Polish Economic Institute note that wage growth was boosted by a notable minimum wage increase, with the share of enterprises reporting plans to raise salaries in the coming months dropping. As a result, they expect wage growth to slow in the coming months. Still, real wage growth should remain positive, by a comfortable margin, which will support consumption and a recovery in savings.