Industrial production in March 2011 increased at constant prices by 9.5 percent year on year (y/y) while revenue from industrial activities grew by 10.7 percent y/y. Seasonally adjusted industrial production was lower by 0.9 percent month on month (m/m), according to the Czech Statistical Office (ČSÚ).
The figures were far below analysts’ expectations. Komerční banka (KB) predicted an 11.8 percent y/y growth in production while the market forecast by news agency Reuters was 12.3 percent. KB also predicted a higher revenue increase, at 11.9 percent. “Czech industry did very well in the first two months of the year, but the March figure disappointed,” KB analyst Jiří Škop said in a market comment.
The year-on-year industrial production growth was boosted most by manufacture of motor vehicles, trailers and semi-trailers; manufacture of fabricated metal products; and manufacture of machinery and equipment. The deepest declines were recorded in electricity, gas, steam and air conditioning supply; manufacture of food products; and manufacture of coke and refined petroleum products, according to the ČSÚ. ‘Czech industry did very well in the first two months of the year, but the March figure disappointed.’
The value of new orders in selected industrial activities increased by 9.7 percent, y/y. Foreign new orders grew by 18.9 percent, while domestic new orders decreased by 4.6 percent.
“The improving situation in industry in recent months reflects positively in the labor market as industry creates new vacancies,” KB’s Skop said. The average number of workers in industrial enterprises with 50 or more employees increased in March 2011 by 4.2 percent, year-on-year. The average monthly nominal wage increased 4.5 percent to Kč 25,990.
In Q1 2011 industrial production increased by 12.7 percent y/y; industrial production adjusted for working days increased by 11.7 percent, with the motor vehicle and fabricate metal sectors again being most significant. New orders in selected industrial activities increased by 13.2 percent y/y in Q1 2011. Foreign new orders increased by 20.0 percent, while domestic new orders grew only by 2.2 percent.
Revenues from industrial activity at current prices increased by 12.9 percent on the year in Q1. Direct export revenues of industrial enterprises at current prices increased by 21.8 percent; domestic revenues, including indirect export via nonindustrial enterprises at current prices, increased by 5.3 percent year-on-year.
Depite the month-on-month drop, analysts remains optimistic for the long term. “This year, we expect growth of industrial production to continue, when it should add around 10 percent, which is roughly same as last year. Compared to last year, industry is disadvantaged by a relatively higher statistical basis. Significant inventory recovery could be expected only in the case of longer-lasting economic growth,” Skop said, adding that in the next few months some production outage should be expected on our main export markets due to the earthquake in Japan.
