Unlike manufacturing in the eurozone, Polish industry continues to be buoyant.
Generous fiscal stimulus helps as does the production structure.
We do not see any imminent threat, as long as consumer spending remains stable in the euro area.
Industrial output decelerated from 9.2% in May to 7.7% year-on-year, close to consensus estimate.
That reflects largely the effect of fewer working days.
Seasonally adjusted manufacturing remained robust at 5.1% YY vs 6.8% YY to date.
With a strong contribution from both the exporters and domestic subsectors, the growth structure remained broadly balanced.
Investment goods production saw double-digit growth while the automotive sector registered solid growth of 12.6% after a few months of significantly weaker activity.
Looking ahead, we expect to see sustained strong production growth.
In Poland, generous fiscal stimulus rekindled domestic demand.
Polish production is also being helped by resilient domestic demand in the euro area.
Polish exports are mainly consumed locally in the eurozone according to WIOD data from the University of Groningen.
So the recession of German production, caused by trade wars and a slowdown in global trade, is not especially painful for Polish manufacturing.
Other economies, e.g. the US and Asia, consume only 14% of exports.
Poland should remain resilient to US car tariffs and China slowdown.
Data from today suggests a strong reading of the GDP in 2Q.
We're expecting a 4.7% to about 5% YoY acceleration.
Domestic demand appears stable, and the underlying structure also suggests solid investments.
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