Industrial sector will remain the main engine of the economy in 2021

May's industrial production result was heavily burdened by last year's base effect, and in seasonally adjusted terms it showed stable growth, above forecasts. Economists predict that industry will remain the main engine of the economy in the coming months of the year.

The Central Statistical Office (GUS) announced today that sold production of industrial enterprises increased by 29.8% y / y in May 2021. In monthly terms, a decline by 0.8% was recorded. After eliminating the influence of seasonal factors, in May this year sold production of industry was 29.7% higher y / y and 0.8% higher m / m. In all major industrial groupings in May this year. An increase in production was recorded in an annual scale, following a decline recorded in the previous year. Production of investment goods increased by 51.3% (against a significant decrease by 38.4% the year before), durable consumer goods - by 49.4% (against a decrease by 13.6%), intermediate goods - by 34.2% (compared to a decrease of 13.4%), non-durable consumer goods - by 12% (compared to a decrease by 8.6%), and energy-related goods - by 8.8% (compared to a decrease by 9.9%).

The market consensus is an increase in industrial production on an annual basis by 29%.

In the period of January-May this year. sold industrial production was by 18.1% higher than in the corresponding period of the previous year, when a decrease of 7.9% was recorded.

An increase in sold production was recorded in 31 out of 34 industrial sectors (in annual terms) in May 2021, which was caused by foreign and domestic demand.

Some economists believe that there is a risk that supply factors (shortages of raw materials, components) and rising costs (raw materials, materials and labor) may inhibit the further upward trend in industrial production.

According to most analysts, data from industry in May did not change the outlook for domestic monetary policy.

Below are the most interesting comments from analysts:

"Production for May (+ 29.8% YoY) without a positive surprise. Record disruptions in supply chains slightly tempered the effect of economic opening (right chart). However, this is still very strong data. Continuation of rebound 1 / x ahead of us" - main economist of ING Bank Rafał Benecki

"We believe that the possible positive tone of key data from the domestic economy in the coming months has a chance to bring about an even greater improvement in moods among observers of the domestic economic situation. The condition of the Polish industry has a chance to strengthen this mood, but one thing is certain - so far the Polish industry is not disappointing. "- Aleksander Beśka, a junior economist from the Market Analysis and Forecasting Team of Bank Pekao

"After eliminating seasonal factors, production increased by 0.8% m / m - the industry, which recovered from the pandemic losses, continues to grow at a solid pace. The sector is benefiting from the recovery in the global economy and the post -andemic jump in demand - both investment and consumption." - analysts of PKO Bank Polski