Czech industrial output increased by 2.2% year on year (chart) and fell by 1.6% month on month in May.

This is slightly up on 2% y/y registered in April, prompting cautious optimism on the local export-oriented market with a robust car sector, where worries persist about the impact of the looming trade war.

“The growth of industrial production in May was, similarly to the previous months, partially influenced by a low comparison basis from the previous year in electricity, gas, steam and air conditioning supply,” commented Veronika Doležalová of the Czech Statistical Office (CZSO).

She added that “manufacture of other transport equipment, in which important long-term orders have been completed, and manufacture of electrical equipment supported growth.”

The overall production of manufacturing was up by 1.5% y/y despite the drop in production of computer, electronic and optical products. The average number of employees in the industry dropped by 2%.

The value of new orders increased by 5% y/y, with new non-domestic orders up by 7.2% y/y, and domestic new orders up by 1%. In m/m terms, the value of new orders fell by 3.9%.

“The value of new industrial orders increased in May, mainly thanks to the manufacture of motor vehicles, trailers and semi-trailers,” Irena Stupňánková of CZSO’s Industrial Statistics Unit noted, adding that “the growth was partially influenced by a low comparison basis too,” and that metal products and manufacture of fabricated metal products registered increase.

Analyst at Generali Investments, Radomír Jáč, pointed out for Czech Television (CT) m/m drop, “which came after a series of m/m growth,” and that it is hard to judge whether the drop was affected by US-imposed tariffs.

Although many market analysts expect an overall slowdown in the country’s economy in the upcoming months, the cooling might not be as steep as previously projected. However, much will depend on whether the EU will reach a deal with the unpredictable administration of US President Donald Trump.  

“If the [tariff] hike is averted, the growth of industrial production in the second half of this year could speed up a bit and reach 1.5% for the whole year,” Patrik Ružomberský of UniCredit Bank was quoted as saying by CT.