POLAND: Retail Sales, Construction Output Disappoint In June

Poland's real retail sales fell short of expectations in June, printing at +4.4% Y/Y versus the median estimate of +5.3% (as per the Bloomberg survey). The outcome was situated towards the bottom end of the forecast range. Construction output also disappointed, shrinking by 8.9% Y/Y versus the median estimate of -5.1%, representing a considerably worse outturn than any of the sell-side forecasts.

• ING write that "consumers remain cautious about spending, despite their improving incomes," adding that consumption growth in 2Q24 was slightly slower than in 1Q24, while GDP growth was probably closer to +2.8% Y/Y than to their earlier forecast of +3.0%. They expect a stronger rebound in the construction sector to take place only in 2025; in real estate development it might be already in 2H24.
• mBank describe the latest package of data as rather weak. They write that the retail sales print was not bad, but worse than expected, with growth slowing in Q2 relative to Q1. They expect a recovery in the construction sector to come only next year. In their view, the whole package of data for Q2 implies lower economic growth than the +3.1% Y/Y they had previously pencilled in.
• The Polish Economic Institute point to the boost to real retail sales from the automotive sector (+24.3% Y/Y), with consumers still reluctant to make other large durable goods purchases. They attribute weakness in the construction sector to a cyclical pause in EU-funded investments.