The slowdown in Czechia's industrial production in March was the worst fall since 2016, after it fell by 1.1% y/y, in a surprise result for the market, according to official figures.
“This is the worst result since the middle of 2016. However, the annual decrease was due to a significantly lower number of working days compared to the previous year. After calendar adjustment, industry grew by 5.5%,” Raiffeisen Bank (RZB) said in a note.
The industrial production decline has been largely driven by the weaker performance of the automobile sector, which is showing signs of saturated domestic and foreign demand for some time, according to RZB. “For this year, we estimate a slight slowdown in growth rates at still solid 4%,” the bank said.
In related news, retail sales also fell in March, dropping by 1.8% y/y, which has contributed to the slowdown.
“On the other hand, retail sales excluding cars grew by 5.5% y/y. The decrease in retail sales is mainly driven by motor vehicles whose sales fell by almost 12%. For this year, the growth of retail sales we estimate slightly faster by 7.1%,” RZB said in a note.