Czech industrial output increased for the ninth straight month in August, bolstering hopes the economy can maintain the pace throughout 2015 after growth returned to pre-crisis rates in the first half.
Industrial production growth accelerated to 6.3% y/y in August from July’s hike of 4.6%, according to data released by the statistics office on October 7. Seasonally-adjusted output was 4.3% lower than in July, when it moved up 1.2% m/m.
In the key manufacturing sector, growth sped up to 6.6% from 4.4% in July, mainly reflecting stronger expansion in the auto sector. Auto production increased 10.2% y/y in August, following a 9% hike in July.
At the same time, the mining and quarrying industry and the utilities sector saw weaker growth in August. Mining output increased 6.1%, after a 9.1% hike in July. Growth in the utilities sector slowed to 4.5% from 5.4%.
New industrial orders rose 7.9%, continuing an upward trend that has been sustained for more than two years now. Moreover, the growth strengthened substantially from 2.2% in July.
Across the first eight months of 2015, industrial production increased 5.1% y/y. Analysts at Komercni Banka see full-year growth at 6.7%, with further acceleration to 7.4% in 2016. Still they warn of rising risks to growth including the slowdown in China, the Volkswagen scandal, and turbulence on financial markets.
“It is hard to estimate the fallout of the Volkswagen emissions scandal on car and auto components production. We assume that the direct impact on the real economy will be limited. However, the risk is a drop in investment within the VW Group and in the supply chain, which can threaten growth prospects of not only the automotive industry”, the analysts say.
In a separate report, the statistics office said construction output grew 4.7% y/y in August, easing from a 12.3% hike in July.
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