Polish Construction Output Misses Forecasts; Industrial Inflation Hits Three-Year High

Poland's construction and assembly production saw a year-on-year increase of 3.9% in May, according to data from the Central Statistical Office (GUS). This figure fell below the 5.1% average forecast by economists surveyed by "Rzeczpospolita" and "Parkiet." After seasonal adjustment, production rose by 4.8% year-on-year and 0.8% compared to April.

Within the sector, specialized construction works performed best, with production growing by 10.8% year-on-year. Building construction also saw growth, albeit at a lower rate of 5.8% year-on-year. However, the construction of civil engineering and water structures recorded a decline of 1.8% year-on-year.

Economists anticipate that construction output in the coming months will be significantly influenced by an investment revival, partly due to the accumulation of EU funds. Tomasz Tyc, a senior economist at Bank BNP Paribas, forecasts an unprecedented inflow of European funds this year, potentially reaching approximately 50 billion euros (around 210 billion PLN) if the National Recovery Plan (KPO) is fully utilized. Grants from the KPO are expected to provide a substantial impulse for investments, with nearly 60 billion PLN anticipated to reach beneficiaries by the end of the year.

Additionally, funds from the regular EU budget have gained momentum since last winter, following a slowdown at the turn of 2024 and 2025 related to the change in the EU's long-term financial perspective. A new source of funding is the SAFE program, under which Poland will receive loans totaling 43.7 billion euros designated for defense. Meanwhile, producer price inflation in the construction sector has been on an upward trend for over six months, reaching 5.5% year-on-year in May, matching April's figure and marking the highest readings in two years. Prices in construction increased by 0.2% compared to April.

“

Na ten rok przewidujemy bezprecedensowy w polskiej historii napływ funduszy europejskich, którego wartość przy pełnym wykorzystaniu środków z Krajowego Planu Odbudowy może wynieść ok. 50 mld euro (ok. 210 mld zł). Impulsem dla inwestycji będą zwłaszcza dotacje z KPO. Do końca bieżącego roku do beneficjentów powinny trafić jeszcze granty o wartości blisko 60 mld zł