Poland's Wage Growth Beats Expectations, PPI Deflation Deepens

Statistics Poland released the first batch of October macroeconomic data. Weaker than expected factory-gate inflation and industrial output as well as a marginal miss in employment came alongside an expectation-beating wage growth.

• PPI -4.1% Y/Y (BBG est. -3.6%)
• Industrial Output +1.6% Y/Y (BBG est. +1.7%)
• Average Gross Wages +12.8% Y/Y (BBG est. +12.0%)
• Employment -0.1% Y/Y (BBG est. 0.0%)

Commenting on these data, the Polish Economic Institute wrote that PPI deflation will support a continued slowdown in consumer inflation, albeit services price increases may remain significant. They believe that the manufacturing sector is past its lowest point, even if the latest outturn was boosted by a difference in the number of working days.

• ING point to firm growth in real wages (+5.8% Y/Y) and a relative stabilisation in employment as signs of the resilience of the labour market to the overall slowdown in economic activity, which translates into a strong starting point for a rebound in GDP growth.
  
• Pekao write the manufacturing sector could be described as the good (industrial output returned to growth), the bad (renewed growth was due to the Y/Y difference in working days and a rebound in energy output), and the ugly (sold industrial output is 3.6% lower than in spring 2022).