Factory activity contracts for an eighth month as output and orders slide, testing confidence in stabilization efforts.

As January opens, Poland’s manufacturing sector remains under pressure, extending a downturn that has now lasted most of the past year. Factory activity has contracted for an eighth consecutive month, underlining the depth of the slowdown and raising fresh questions about how quickly Europe’s fifth‑largest manufacturing base can regain momentum.

Across industrial hubs from Silesia to Greater Poland, producers report falling output and weakening demand. New orders have dipped sharply, reflecting cautious spending by both domestic buyers and overseas clients. Executives describe a landscape shaped by subdued consumer confidence, soft export markets, and lingering cost pressures that continue to squeeze margins.

The latest signals suggest that manufacturers are trimming production schedules and delaying investment decisions. Warehouses are filling more slowly, but not because demand is recovering; rather, firms are working through existing backlogs while avoiding the risk of overproduction. Hiring plans remain conservative, with many plants relying on overtime adjustments instead of new staff.

Poland’s factories sit at the intersection of several global and regional forces. Slower growth among key European trading partners has weighed on export‑oriented industries such as automotive components, machinery, and household appliances. At the same time, supply chains that were once disrupted by shocks have normalized, removing the urgency that previously boosted orders.

Energy costs, while less volatile than in earlier periods, are still cited as a concern. Manufacturers also point to financing conditions that, though gradually easing, remain tight enough to discourage expansion. Smaller firms appear particularly vulnerable, lacking the buffers that larger exporters use to weather prolonged weakness.

Economists are closely watching whether recent stabilization measures will gain traction. Monetary policy signals from the National Bank of Poland have aimed to balance inflation control with support for growth, while government initiatives focus on investment incentives and the absorption of European funds. The impact of these efforts, however, is expected to take time to filter through to factory floors.

Some analysts note tentative signs of stabilization beneath the surface. Supplier delivery times have steadied, and inventories are no longer rising as quickly as before. These developments suggest that the sector may be approaching a turning point, even if a clear rebound has yet to materialize.

For now, sentiment in boardrooms remains guarded. Manufacturers are planning cautiously, prioritizing efficiency gains and cost control over capacity expansion. Many are betting that a gradual improvement in external demand will arrive later in the year, helping to lift orders and restore confidence.

The persistence of the downturn matters beyond factory gates. Manufacturing has long been a pillar of Poland’s economic growth and export strength. Its prolonged weakness risks spilling over into employment, investment, and public finances if conditions fail to improve.

As the year begins, the central question is whether the worst has passed. The coming months will test the effectiveness of stabilization policies and the resilience of Poland’s industrial base. Until clearer signs of recovery emerge, the manufacturing sector is likely to remain a focal point for policymakers and investors alike.