By Pawel Florkiewicz and Gergely Szakacs
Feb 1 (Reuters) - Central European manufacturing surveys
in Poland and the Czech Republic beat market forecasts in
January, while Hungary's reading showed continued growth, with
firms reporting slightly improved prospects for the months
ahead.
The region's economies were hit hard by the fallout of the
war in neighbouring Ukraine, which sent energy prices and
inflation soaring across central Europe, hitting industries and
slamming the brakes on economic growth.
But amid a fall in gas prices since the start of the year,
the January surveys offered a glimmer of hope that the region's
economies could be near a turning point.
Capital Economics said its regional-weighted economic
sentiment measure for central and Eastern Europe hit a
four-month high in January, and while a contraction in most
countries was on the cards in the first quarter, the worst of
the downturn could have already passed at the end of last year.
The slump in the Polish manufacturing sector continued in
January, but rates of decline in production and new orders
softened and hopes grew for improved conditions in the months
ahead.
S&P Global's Polish Manufacturing Purchasing Managers' Index
(PMI) rose to 47.5 in January from 45.6 in December, and while
remaining below the 50-point mark separating growth from
contraction, it came in above market forecasts for 46.2.
"The dark clouds over the European and Polish industry are
thinning out a bit, but the prospects are still unfavourable,"
economists at ING said.
Monika Kurtek, chief economist at Bank Pocztowy, said the
January figures showed that the worst may be over for the
manufacturing sector of the region's biggest economy, barring
any escalation of the war in Ukraine.
"The dynamics of industrial production in the coming months
will slow down further (following the reported decrease in
domestic and foreign orders), however, there is a light at the
end of the tunnel," she said.
Czech data released on Wednesday painted a similar picture,
with manufacturing shrinking at a slower rate in January and
producers turning more optimistic about the outlook.
The S&P Global Purchasing Managers' Index (PMI) rose to 44.6
in January from 42.6 in December, also above market forecasts
for 43.5.
The PMI survey showed orders decreased and input prices
increased, with material and energy costs taking a toll.
Manufacturers, though, were able to pass on costs to clients
despite weak demand, the survey said, a possible risk to the
region's rocky path towards disinflation.
Hungary's seasonally adjusted Purchasing Managers' Index,
compiled under a different methodology, dropped to 55 in January
from a revised 59.3 in December, but remained above both the
long-term monthly average and an average reading in the same
month of the past three years.
(Additional reporting by Robert Muller in Prague; Writing by
Gergely Szakacs;
Editing by Bernadette Baum)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.