CEE Watch: PMIs again underline supply barriers amid strong demand

Slightly mixed results in April Manufacturing PMIs in the region do not alter ongoing strong growth trends — rise in output remains constrained by supply-side factors leading to record high price pressures.

Chart 1 - April Manufacturing PMI in CE-3 rise on average but still lag Euro Area (points)
Refinitiv, RBI/Raiffeisen Research

Regional overview

While the broad trends remain intact, the April results in Manufacturing PMI were mixed. Czech and Hungarian PMIs increased, while the Polish index retreated for the first time since July 2020. PMI also dropped in Russia while remaining above 50 points.

In Hungary, the Manufacturing PMI inched above 50 points in April (50.8) after staying below 50 in February and March. While the Hungarian data is much below regional peers, it may be explained by the different data provider than in most other countries. Still, similar trends are visible — rising output, high orders, and soaring prices.

(Dorota Strauch, Zoltan Torok)

Chart 2 - Input prices soar, but so far passed on to consumers at a clearly slower rate
Refinitiv, RBI/Raiffeisen Research
PMI Manufacturing Input Prices Index
Chart 3 - Delivery times lengthen further amid material shortages
Refinitive, RBI/Raiffeisen Research
PMI Manufacturing Delivery Times Index


The Czech manufacturing PMI rose to 58.9 from 58.0 in April, matching the consensus estimate of 59.0. The details of the report were both upbeat and unsettling.

On a positive note, new job creation has accelerated at the fastest rate since February 2018. The pace of new orders and output growth remained strong but lower compared to March. Firms highlighted improving conditions especially in foreign demand (3 year high) as some export markets reopened. This hints at a solid recovery of the industrial sector this year, close to 7%, in our view.

Now, on a sour note, supply disruptions worsened. Firms are faced with material shortages and supplier delays putting limits on production capacity. Combined with preemptive stockpiling, input prices soared once again. This will likely push producer prices close to 4% yoy in the coming months.

(David Vagenknecht)


The Polish Manufacturing PMI surprised to the downside and reached 53.7 points vs 54.3 previously. The decline is mainly the result of ongoing supply-side constraints due to the shortage of materials and of staff. The former remains the key problem as suppliers’ delivery times lengthen to the extent not reported ever before in the survey. This results also in record input price inflation which is passed on to consumers.

A slight shift compared to previous months is the decline in the new orders index although still showing improvement (above 50). Export orders remain strong but were growing slower in April and the survey seems to indicate weaker conditions domestically. This could affect further attempts from firms to increase output prices as they may result in a drop in demand. This in turn additionally supports our call for a temporary increase in prices driven by the supply-side bottlenecks. Still, in the short term price pressures should remain visible not only in surveys but also in CPI readings.

(Dorota Strauch)


The Russian PMI slightly decreased to 50.4 points in April, which is also below the 51 points average seen so far in 2021.

Both output and new orders have weakened by 0.8-1 point, hovering around the neutral level of 50. Delivery times have increased since last autumn, but less so than in other countries. Input prices remain elevated (at 76 points; between 72 and 78 for recent months), which is partly reflected in higher output prices (rising to 67 points).

Thus, the PMI indicates only slow growth in the industry, which is consistent with our conservative GDP growth forecast of 2.3% yoy for 2021. However, the manufacturing PMI is only partly covering the industrial sector in Russia and should be taken with caution.

(Andreas Schwabe)

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Dorota Strauch is leading economic research on Poland from the RBI Branch located in Warsaw. She began working in Polish RBI network bank in 2010. In 2017 she became the Head of Polish Research team. Having a master’s degree in Financial Markets and Banking she deepened her knowledge by becoming the CFA charterholder in 2016. In the following years she has been focusing on improving data analysis skills with the use of Python programming language. Apart from current economic developments in Poland and the CEE region she is particularly interested in the impact of new technologies on the economy, politics and society.

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