After three months of decline, Czech industrial output in May grew by 3.3% year-on-year, mainly driven by an increase in car production, according to data released by the Czech Statistics Office. In month-on-month terms, it increased by 2.4% y/y.
"In May, industrial production increased y/y after several months. The result was significantly contributed to by the car production, in which a partial improvement occurred as for the supply of components, compared to the previous year,” commented Radek Matejka, Director of the Agricultural and Forestry, Industrial, Construction, and Energy Statistics Department.
"The y/y growth was reported by the majority of economic activities of industry. However, that growth still was not able to break the stagnation trend, which has been obvious over the whole year 2022, up to now,” said Veronika Dolezalova, Head of Industrial Statistics Unit.
The value of new orders grew by 9.0% y/y, with non-domestic new orders going up by 5.2% y/y and domestic new orders even higher by 17.2% y/y. The increase in non-domestic new orders was slowed down mainly by manufacture of motor vehicles in which, however, an annual decline was caused by a very high comparison basis, the statisticians said.
"Finally, the result was not dragged down by automotive production, which on the contrary contributed significantly to the overall output," Raiffeisenbank analyst Vratislav Zamis told the Czech News Agency. The growth came across sectors, but he said the data shows that Czech industry will have a hard time resisting the stagnation trend.
"Inflation reduces the disposable income of households, which must reduce demand for surplus goods and thus reduce overall consumption," Deloitte analyst Filip Pastucha pointed out. Even according to the business conditions (PMI), the outlook for the coming months is not positive. There is still high uncertainty caused by the war in Ukraine and the related ongoing energy crisis. "For the whole of this year, we expect industrial production to grow by around 1.5%," he predicted.