The downturn in Polish manufacturing worsened in January, a survey showed, as weak demand in key European markets including Germany and the Red Sea shipping crisis weighed on the sector.

S&P Global's Polish manufacturing Purchasing Managers' Index (PMI) fell to 47.1 in January from 47.4 in December, remaining below the 50.0 line that separates growth from contraction for the 21st month in a row. Analysts polled by Reuters had expected a reading of 48.2.

"Polish manufacturers continued to feel the effects of weak export and domestic demand in January," Trevor Balchin, Economics Director at S&P Global Market Intelligence said in a statement.

"Germany was cited as a key source of export weakness in January, though its flash manufacturing PMI rose to an 11-month high, suggesting the worst of its downturn has passed."

New orders posted their steepest decline in three months, with lower demand linked to the weak German economy, competition from Asia, excess stocks at customers and a lack of investment.

Output fell for the 21st month in a row, matching the previous record sequence registered between October 2000 and June 2002.

Meanwhile, suppliers' delivery times lengthened. The extent of the delays was the biggest since August 2022 with companies pointing to the deteriorating security situation in the Red Sea as a key factor.

(Reporting by Alan Charlish; editing by Christina Fincher)