INSTANT VIEW 3-Polish Sept PMI falls to 47.0 pts, below forecast

(Adds analyst comment)

WARSAW, Oct 1 (Reuters) - Poland's Purchasing Managers' Index (PMI)

fell to 47.0 points in September, below analysts' forecast, signalling the worst performance of the country's economy in more than three years, data released by Markit and HSBC showed on Monday.

The reading was pushed down mainly by a fall in new orders, backlog and weak output, while employment fell for the first time since March.

Any level of the index above 50 points indicates expansion, while a number below 50 signals contraction.

Sept 2012 Aug 2012 Sept 2011 PMI 47.0 48.3 50.2 OUTPUT 46.9 47.9 51.7

NOTE: All indices are seasonally adjusted and are based on data collected from purchasing executives in manufacturing companies in Poland.


Analysts polled by Reuters expected the PMI to fall to 48.0 points in September

. MARKET REACTION: The Polish zloty was largely unchanged immediately after the data release. ANALYSTS' COMMENTS:


The negative signals seen in the previous months' PMI readings have intensified. We should expect more negative surprises in activity data in comming months, which should soften the MPC's tone further and result in rate cuts.

We expect a 25 cut in October and about 100 basis points of cuts within the next 9 months. The yield curve aleady prices 100 points of cuts, but should the MPC send more dovish signals this month and data really deteriorate, the curve may start to price even 125-150 basis points of cuts.


The index is lower than we had expected. It confirms the weakness in data recently published by the stats office. It also confirms the fact that economic activity is falling and shows that the crisis in the eurozone has a negative impact on the economy.

The Polish MPC can cut rates by 25 bp this week. We also expect one 25-point cut in November, and another one in the first quarter of 2013. Further cuts will depend on the incoming data and whether the figures confirm a further slowdown in the economy.


"The fall of the manufacturing PMI index towards crisis mid-09 lows is a negative surprise even compared to already negative expectations. The September survey showed deepening contraction of output and new orders as well as falling employment.

The negative growth showing in real activity data along with employment bordering on contraction and real wage bill growth already negative for the past couple of months are likely to push the Monetary Policy Council to deliver a first rate cut in November."

The scale of the monetary policy easing in the upcoming cycle is still an open question as the leading indicators domestically and abroad, among them PMI, still give no indication of the economic slowdown bottoming out in the near future."


* Poland outlook unaffected by deficit move - S&P

* Polish head signals easing cycle, not one-off cut

* Polish retail sales touch weaker, add to rate cut case

* Polish output slows sharply, interest rate cut seen soon

(Compiled by Dagmara Leszkowicz)

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Keywords: POLAND PMI/