Page 13 - Poland Outlook 2022

4.3 Industry

Expectations for Polish industry are for robust growth in 2022 with median
forecasts – as based on projections from major banks – coming in at just over
7%. That is naturally just half of the expansion rate expected in 2021 (full data
for last year are expected in later January) when the industrial sector shot up
after the pandemic-induced recession of 2020. Also the PMI readings
consistently point to the sector remaining in expansion mode in the new year.

Growth will be supported by good economic conditions abroad and the
recovery of the world economy after the pandemic, supported by
accommodative fiscal and monetary policies. A relatively weak zloty will
additionally support the price competitiveness of Polish exports.

Poland’s strength is also the large diversification of production, which means
that even if the demand for some goods, such as furniture or household
appliances, starts to weaken, it may be compensated by an increase in sales
in another area, for example the automotive sector.

Industry could also turn out to be an important driver of investment in 2022,
some analysts say. Especially producers of durable goods should invest in
expanding production capacity, as solid demand for these goods is expected to
remain, exceeding output capacity.

Risks to the outlook are dominated by the slower than expected fading of
supply chain problems or even their intensification on the back of the yet
unforeseen impacts of the pandemic. An energy crisis cannot be ruled out,
either, as Poland’s coal-based power generation sector is now a worry for
industrial companies due to the increasing cost of energy because of the
growing price of carbon dioxide emissions permits. Poland’s power generation
sector is one of the most emissions-intensive in the EU.

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