Poland’s Purchasing Managers’ Index (PMI) rose to 48.7 points in March from 47.1 in February, signalling a slower deterioration in manufacturing conditions but remaining below the 50-point threshold that separates growth from contraction, S&P Global said on April 1.

The PMI is a composite indicator covering new orders, output, employment, suppliers’ delivery times and stocks of purchases. The increase in the headline index reflected a return to growth in output, alongside slower declines in new orders and inventories, as well as longer suppliers’ delivery times, S&P Global said.

“There were positives and negatives to take from the March PMI data for Poland. Goods producers raised output for the first time in nearly a year, but the rate of growth was weak as new orders fell further,” Trevor Balchin, economics director at S&P Global Market Intelligence, said in a statement.

“The downturn in demand slowed notably from February, however, which actually lifted the headline PMI by more than the output component. The PMI was also boosted by the greatest lengthening in suppliers' delivery times since June 2022,” Balchin also said.

The reading showed production increased for the first time since April 2025, ending a ten-month sequence of decline, although the pace of growth remained modest due to weak incoming demand.

New orders fell for the twelfth consecutive month in March, linked to subdued market conditions and uncertainty related to the war in the Middle East. While export demand contracted more sharply, the overall pace of decline in total new orders eased compared with February.

Manufacturers continued to reduce headcount, with employment declining for the eleventh month in a row and at the fastest rate since September 2023, reflecting lower workloads and restructuring efforts.

Purchasing activity weakened further and stocks of inputs fell again. At the same time, suppliers’ delivery times lengthened markedly, with firms citing supply chain disruptions linked to the Middle East conflict.

Cost pressures intensified sharply, with input price inflation accelerating to its highest level since October 2022, driven by rising energy, fuel and commodity prices. This fed through to output prices, which increased at the fastest rate since January 2023.

“The conflict's impact was also immediately flagged by the PMI price gauges. Input price inflation accelerated sharply to the highest since October 2022 during the first year of Russia's full-scale invasion of Ukraine,” Balchin said.

Despite ongoing challenges, Polish manufacturers remained moderately optimistic about the coming year, although confidence eased to a three-month low amid uncertainty over the global economic outlook.

Domestic analysts say Polish manufacturing is at a crossroads now because of the conflict in the Middle East.

“Output growth provides a positive signal, but other components of the index remain weak. At the same time, operating costs are rising, which – if the Middle East crisis persists – could push the sector towards stagflation conditions,” PKO BP said in a note.

Still, PKO BP analysts added, Polish manufacturers remain moderately optimistic. 

“Companies expect a recovery in demand, an improvement in business conditions, and positive effects from ongoing investments and expansion into new markets. This outlook may indicate a degree of resilience to external shocks, and if expectations are met, strong economic growth this year should remain intact,” they said.

Polish GDP growth is expected to be about 3.5% in 2026.

Poland’s industrial output grew 1.5% year on year (y/y) in constant prices in February, a changeover from a fall of 1.5% y/y the preceding month, latest available real data from the statistical office GUS showed in March.

Meanwhile, Poland’s producer price index (PPI) declined 2.3% y/y in February after a fall of 2.6% y/y the preceding month, further extending the deflation trend that began in mid-2023, GUS also said in March.