Corporate conditions leading index improves
July 29, 2014
Poland's WWK composite corporate leading sentiment indicator edged up by 0.2 pts in July to 153.4 pts, but is still below the April record high level, according to the WWK report from the BIEC agency.
"Despite the July rebound, the index is below its local peak recorded in April this year," the report reads. "Additionally, its auxiliary measures, signaling both the strength of growth and the distribution of positive and negative trends, have been for a few months suggesting that growth is losing momentum."
Of eight index components, five had a positive contribution, one didn't change and two dragged the index down.
The most worrying signs are seen in new order inflows, where managers have seen declines for the third month running. That concerned both export and, to a lesser degree, domestic orders. That lower order inflow translated into a lower production.
Due to lower orders, inventories of finished products increased.
Despite lower orders and production, financial situation of firms has not deteriorated.
Among positive contributors, BIEC lists good perception of the outlook for the economy and increasing household credit, but with a note that domestic demand is rebuilding only very slowly, as confirmed by M3 money supply data.
Labor productivity improved after a few months of deterioration.