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Manufacturing in Poland grew for the first time in nearly three years in February, while the decline in Czech activity was the slowest since mid-2022, according to surveys released on Monday.
In Hungary, a separate manufacturing sentiment survey also signalled a return to expansion, and a Romanian survey showed a slight improvement from a record low.
The surveys lend support to expectations of a faster recovery this year in Central Europe's economies, which have been buoyed since last year primarily by a rebound in consumer activity following a cooling of inflation.
However, businesses have faced challenges with declining order books and weak demand from the region's largest trade partners, particularly Germany, their close neighbour, Reuters reports.
Moreover, Central Europe's export-driven economies are also now facing the potential risk of US tariffs impacting global trade, with the region's car sector being particularly vulnerable to the fallout, despite limited direct trade links with US markets.
In Poland, the S&P Global Purchasing Managers' Index rose to 50.6 in February, surpassing the 50 mark that separates growth from contraction for the first time since April 2022.
S&P Global reported that the volume of new incoming orders increased alongside production.
Poland's sizable domestic market makes its economy less susceptible to weak trade conditions compared to other countries in Central Europe.
“There is no doubt the Polish economy has very good prospects ahead of it. However, the situation outside Poland's borders, including in Germany, remains uncertain,” said Monika Kurtek, chief economist at Bank Pocztowy.
Furthermore, S&P Global stated on Monday that countries such as the Czech Republic, Hungary, Slovakia, Slovenia, and Romania are more vulnerable to US President Donald Trump's proposal to impose 25% tariffs on EU imports.
According to 2023 Eurostat data, exports make up a significant portion of output, ranging from 92% in Slovakia to 69% in the Czech Republic.
Hungary's PMI, released by the country's Association of Logistics, Purchasing, and Inventory Management, increased to 51.0 in February, after being flat the previous month.
“Manufacturing is clearly affected by (global and domestic political) factors, but February might be an early sign of a bottoming out,” according to a note by Erste Group Bank.