Poland's manufacturing sector shrank further in May but at a shallower pace as inflationary pressures eased, a survey showed on Thursday.

S&P Global's Polish manufacturing Purchasing Managers' Index (PMI) rose to 47.0 from 46.6 in April, remaining below the 50.0 line that separates growth from contraction. Analysts polled by Reuters had expected a reading of 45.9.

The latest data "revealed a sustained downturn in demand and output in the sector, linked to excess stocks and tight funds at clients," said Trevor Balchin, Economics Director at S&P Global Market Intelligence.

"More positively, the supply side situation improved markedly ...as suppliers' delivery times quickened the most in any month over the past decade," he added.

This relieved pressure on costs as average input prices fell at the fastest rate since the survey began in 1998.

Output declined for a thirteenth successive month due to weak demand, but the rate of decline eased. Firms said that a lack of funds and excess stocks held by clients were limiting new orders.

However, average input prices fell for the second month in a row, helped by lower raw material prices and the stronger zloty exchange rate. As a result, output prices dropped at the fastest pace on record.

Companies expected output to pick up over the coming year as inflation falls, but their degree of optimism had eased to levels seen at the beginning of 2023.


(Reporting by Alan Charlish; editing by John Stonestreet)