diff --git a/compiler/src/prog8/CompilerMain.kt b/compiler/src/prog8/CompilerMain.kt
index 67838b04c..f415ee506 100644
--- a/compiler/src/prog8/CompilerMain.kt
+++ b/compiler/src/prog8/CompilerMain.kt
@@ -106,10 +106,7 @@ private fun compileMain(args: Array<String>): Boolean {
     }
 
     val outputPath = pathFrom(outputDir)
-    if(!outputPath.toFile().isDirectory) {
-        System.err.println("Output path doesn't exist")
-        return false
-    }
+    outputPath.createDirectories()
 
     if(profilingInstrumentation==true && compilationTarget!=Cx16Target.NAME) {
         System.err.println("Profiling instrumentation is only available on the cx16 target.")
diff --git a/docs/source/compiling.rst b/docs/source/compiling.rst
index 0617722a7..f563bcb6e 100644
--- a/docs/source/compiling.rst
+++ b/docs/source/compiling.rst
@@ -231,7 +231,7 @@ One or more .p8 module files
     So you have to make sure these are provided somewhere in the alternate source path.
 
 ``-out <directory>``
-    sets directory location for output files instead of current directory
+    Sets directory location for output files instead of current directory. Creates it if it doesn't exist yet.
 
 ``-plaintext``
     Prints output messages in plain text: no colors or fancy symbols.