“The Polish economy once again surprises positively and embarrasses those who have announced a slowdown. In January, we bought and produced much more than last year. The real boom, however, took place in construction as it grew at its fastest rate in 11 years,” writes Bartosz Grejner, Conotoxia analyst.
Retail sales in our country increased by 8.2% this January compared to January of 2017 according to the Polish Central Statistical Office (GUS). Clothing and footwear purchases increased by 16.3%. Prices compared to last year were about 4% lower and continued the downward trend that had been observed for a long time.
Sales of cars and motorcycles increased by about 12.5%. This industry was also dealing with a price drop of almost 5% in January 2018. The reductions are most likely the effect of post-Christmas sales as well as the promotions on previous year’s models.
The real boom occurred in the Polish construction industry. GUS reports from January announce that production in this sector jumped by 34.7% annually, the most in 11 years. Even when eliminating seasonal factors, the change amounted to 30.7%. The nearly 40% increase was recorded in companies specializing in building construction as well as in specialistic construction works. The favorable and warm weather conditions this winter could have contributed to the significant increase.
All industrial production increased by 8.6% on a yearly basis, which should positively affect Poland's economic growth. In turn, retail sales are a good measurement of consumption, which is about two-thirds of Poland’s gross domestic product. Its continuous and significant progression, combined with the acceleration in construction and investments, increases the probability of high, and perhaps slightly better than expected, GDP growth in the first quarter.
Consumption is driven by Poles’ earnings
In the next part of the year, we will probably continue to observe a significant increase in consumption and retail sales, which are factors that positively stimulate the economy. However, it may be extremely difficult to maintain such a high rate of change, although much depends on wage increases.
Salaries have been increasing at a rate of about 7% annually. However, for example, Eugeniusz Gatnar from the Monetary Policy Council expects an acceleration to even 10-12% in the second part of the year, which could further drive consumption.