The recovery spreads across more areas of manufacturing

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

Poland’s manufacturing sector finished last year on a strong note. According to data published by Statistics Poland (GUS), output in December 2025 rose by 7.8% year on year.

The recovery in manufacturing is no longer confined solely to capital goods. Until recently, buoyant conditions in this segment had been the main driver of growth - and it remains the area where output is expanding fastest. In December alone, production of investment goods jumped by 17.1% year on year, while the three-month average stood at 10%.

Production of durable consumer goods is now joining the upturn. In December, output in this category increased by 7.8% year on year, with a 5.1% rise over the past three months. At the same time, production of nondurable consumer goods and intermediate goods has also begun to accelerate.

The revival in capital goods production remains in full swing, driven by the energy transition and EU funding. The expected bunching of spending from Poland’s National Recovery Plan (KPO) and the broader EU budget suggests that favorable conditions in this part of manufacturing are likely to persist into 2026.

Explainer

The National Recovery and Resilience Plan (KPO) is a development strategy outlining Poland’s objectives for rebuilding and strengthening the country’s socio-economic resilience following the COVID-19 pandemic, along with the reforms and investments needed to achieve them.

The investments and reforms defined in the KPO are intended to restore the economy’s growth potential lost during the pandemic, enhance competitiveness, and improve living standards.

Growth in the production of durable goods appears to be largely the result of stronger demand from Polish consumers. Retail-sales data from the second half of 2025 showed robust increases in home-furnishings items as well as cars, motorcycles and parts. This, in turn, reflects rapid growth in real incomes and interest-rate cuts.

Demand for durable consumer goods could be even stronger next year. The main supporting factor will be an improving property market—though a scenario of gradual recovery seems more realistic than a sudden surge. Conditions abroad may be weaker, especially in the euro zone. While there are some signs of improvement there, the rebound remains rather tentative.

Over the whole of 2026, output growth in manufacturing amounted to 3.4% year on year.

The strong momentum in manufacturing is also confirmed by today’s survey data. The general business climate indicator stood at –4.1, its highest reading since September 2021. Assessments of current conditions improved markedly, while expectations for the future strengthened more modestly.

Even so, the indicator remains slightly below its long-term average. Based on data going back to 2000, that benchmark stands at 0.5. Sentiment in manufacturing therefore remains somewhat subdued—a pattern that has persisted since the outbreak of the pandemic.

Solid construction output

Construction and assembly production also posted a solid result in December, rising by 4.5% year on year, though a large part of that increase can be attributed to a favorable calendar effect. After seasonal adjustment, output was broadly unchanged from a year earlier.

The fastest-growing segment was specialized construction work, where output surged by as much as 23% year on year. Activity in building construction also rose strongly, with growth of 13.3%.

By contrast, conditions remain weak in civil and water engineering. Output in this category fell by 7.2% year on year in December. As this segment is dominated by public investment, the figures suggest that - contrary to earlier hopes - activity has yet to accelerate meaningfully. Higher absorption of EU funds should change that in 2026. The open question, however, is how much of those funds can be deployed before the end of the year, when the spending window under Poland’s National Recovery Plan (KPO) closes.

Broad-based industrial recovery. Poland’s industrial revival is spreading beyond investment goods to include durable consumer, non-durable, and intermediate goods. In December 2025, total manufacturing output rose 7.8% year-on-year, signaling the broadest growth in several years.
Boost from EU funds and household demand. Strong performance in investment goods is sustained by the energy transition and inflow of EU funds, while consumer goods production benefits from higher real incomes and lower interest rates. The combination suggests continued industrial momentum in 2026, though external demand (especially in the euro area) remains a weak point.
Business sentiment highest since 2021, but cautious. Manufacturing confidence reached its best level in four years (indicator at -4.1), reflecting optimism about current conditions. However, expectations for the future remain tempered, staying below the long-term average, partly due to lingering uncertainty in foreign markets and public investment delays.