Czech industrial production growth eases to 5.5% y/y in Jan 2014, misses expectations

By bne IntelliNews March 14, 2014

Czech industrial production increased for the seventh straight month in January 2014 rising by 5.5% y/y, supported by an expanding auto sector, data from the statistics office showed. Yet, the growth eased from a 2.5-year high of 9.3% y/y in December and missed market expectations for a 6.7% rise.

The seasonally adjusted industrial production went down by 0.5% m/m in January, following a 0.3% m/m drop in December.

The annual growth in January was mainly supported by car production that increased by 15%, easing from a 17.8% y/y rise in the previous month. Other sectors that contributed the most to the annual hike were manufacture of fabricated metal products (contribution +0.9 pps, growth by 10.5% y/y) and manufacture of rubber and plastic products (contribution +0.8pps, growth by 11.9% y/y). Industrial production declined the most in electricity, gas, steam and air conditioning supply (contribution -0.4pps, drop by 2.3% y/y) and printing and reproduction of recorded media (contribution -0.1pp, drop by 7.3% y/y).

Overall, the manufacturing industry expanded for the seventh month in a row in January but the annual growth weakened to 7.6% from 11.8% in December. The mining and quarrying industry shrank by 0.9% y/y in January, after expanding by 1.8% y/y the month before, while the annual decline in the utilities sector deepened to 2.3% from by 0.5%.

Sales from industrial activity advanced by 9.4% y/y in the first month of 2014 driven by a 16.6% hike in export sales. New industrial orders also increased albeit at a softer pace than in December. Stronger foreign demand pushed new orders up by 12.6% y/y in January but a 1.3% decline in domestic orders kept the annual growth below the December’s growth of 20.5%, which was the strongest in more than three years.

IntelliNews comment: The seventh straight increase in Czech industrial output in January signals signs that the economy is gaining strength after exiting a record-long recession in 2013. In 2013 Czech industrial production edged up by 0.5% from 2012 when it shrank by 1.2%. Rising new orders are a positive sign that the sector will continue improving in the next months driven by growing foreign demand. One of the important forward-looking indicators, the purchasing managers index (PMI), also shows that the recovery is on track with the index staying above the 50-mark that signals expansion for the tenth consecutive month in February.


Related Articles

Czech judiciary denounces Poland's move to end separation of powers

Senior Czech judges on July 21 denounced Poland's judicial overhaul as an attack on the rule of law. With big street protests in the Czech Republic's neighbour seemingly gathering momentum – 120 ... more

Strongly profitable Czech petrochemical maker Unipetrol puts cracker explosion behind it

Unipetrol looks to have finally got over the August 2015 fire and explosion that wrecked its steam cracker, an indispensable installation in the production of ethylene feedstock needed to manufacture ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more