KBC Market Research Desk
KBC Bank
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Business sentiment in Polish manufacturing deteriorates, but Czech PMIs remain strong
This morning, August regional PMI indices have been released in all CE countries. Figures from Warsaw have grabbed most attention as Purchasing Managers’ Index in Polish manufacturing fell sharply, from 54.5 to 51.1. According to an official release, the loss of momentum was observed in several key areas where output growth rates, new orders and exports all have slowed down sharply in recent weeks. On the other hand, positive news was that the sub-index for employment still grew at a solid pace. We can conclude that today´s mixed PMI release is in-line with hard data released in Poland last month (particularly retail sales and industrial production).
The other regional PMI indices – data on the Czech and the Hungarian business sentiment – published this morning remained broadly in-line with market expectation. The Czech PMIs, supported by growing European demand (first of all in the automotive industry), stayed strong with the headline figure at 56.6. In contrast to the robust Czech outcome, its Hungarian counterpart stood at just 50.7 points. Although the latter headline index was up by 0.8 percentage points from 49.9 in July, the production quantity sub-index dropped in comparison to July and signals contraction for the second consecutive month.
As concerns market reaction, regional traders have shrugged-off the news and continue to monitor the core markets, where risk sentiment deteriorated following disappointing Chinese PMI’s.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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