An empirical assessment of the relationships between the manufacturing sector, economic growth and changes in price indexes: The case of Poland

The manufacturing sector, as a traditional economic sector, is still the backbone of the economies of many countries around the globe. The sector contributes as much as 16.9 percent to global employment, 15.7 percent to global GDP and had a growth rate of 1.9 percent in 2017. The focus of this study is on the manufacturing sector in Poland. Manufacturing in Poland, an upper-middle income country, is also still the dominating economic sector in the country, contributing 17.6 percent to GDP and had a growth rate of 6.1 percent in 2017. The primary aim of the study was to analyse the causal relationships between the manufacturing sector, economic growth, and changes in price levels (CPI, PPI and PMI) in Poland. A quantitative methodology was used in an econometric time series analysis of the relationships between the variables. The results of the analysis confirmed both long and short-run relationships between the variables. It was also established that all the independent variables caused changes in the manufacturing sector. Conclusions were listed based on the analysis and include the importance of the industry for economic growth and the impact of changes in prices should be limited as it has a negative impact on the main sector.