Business Leading Indicator (WWK), informing in advance about future trends in the Polish economy dropped by 6 points m/m to 135.1 points in May, the Investment and Economic Cycles Office (BIEC) said.. A month earlier the indicator fell by 19.4 points.
"There are more and more companies losing orders, and the accumulated stocks of finished products fill the warehouses. The phenomenon of falling orders concerned all industries, but it affected the producers of durable consumer goods the most. Orders declined equally from foreign and domestic contractors. Following the decline in orders and with lower production, the financial situation of enterprises also deteriorated," the report reads.
The only component of the indicator that acted towards its increase was the M3 money supply. This increase, however, does not reflect potential demand that could prevent a further decline in the economy's activity; it only illustrates the degree of government indebtedness and the tendency of market participants, including households to store cash in a period of heightened uncertainty.