WARSAW (Reuters) - The downturn in Polish manufacturing accelerated in July, a survey showed on Monday, as output and new orders fell sharply due to an uncertain economic outlook and high inflation.

S&P Global's Polish Manufacturing Purchasing Managers' Index (PMI) fell to 42.1 in July from 44.4 in June, below the 50.0 line that separates growth from contraction. Analysts polled by Reuters had expected a reading of 43.6.

We should be under no illusions of the scale and speed that the downturn is occurring: the index numbers we're seeing for both output and new orders have only been beaten to the downside during periods of extreme stress, said Paul Smith, Economics Director at S&P Global Market Intelligence.

Firms and their clients are understandably growing worried about recession, with high inflation and geo-political uncertainty, especially in relation to Ukraine, leading to much hesitancy within the European marketplace.

Manufacturing production declined at its fastest rate since the height of the COVID-19 pandemic, while the contraction in new orders was among the biggest in the survey's history.

Business confidence slipped into negative territory for the first time since April 2020, as fears of recession mounted, and firms cut staffing levels for the second month in a row.

(Reporting by Alan Charlish; Editing by Toby Chopra)