The Czech manufacturing PMI index, compiled monthly by the market intelligence company S&P Global Market Intelligence, posted 54.1 in August (chart), the best result since April 2022 (54.4).

It is also up from 52.2 posted in July, when it worsened from 53.9 in June. The PMI has remained on or above the 50-point mark separating growth and decline since February.

"The Czech manufacturing sector continues on an upward trajectory as the third quarter progresses, with stronger expansions in output and new orders in August,” commented Siân Jones, principal economist at S&P Global Market Intelligence.

“Encouragingly, firms boosted capacity by renewing employment growth, with headcounts rising at the quickest pace since May 2022,” she added.

S&P panellists reported improved demand conditions, especially among international clients, which helped boost new orders and rise in production levels.

The rate of growth in new sales was the quickest since February 2022, while the rate of expansion was the second-fastest in five years, S&P noted.

Despite the sales growth and rise in employment, firms still coped with supplier delays and logistics issues in connection with the war in the Middle East, and August was the sixteenth consecutive month with a decline in vendor performance, S&P also noted.

Although inflation pressures eased, panellists still reported passing on higher costs to customers.

"Underlying data signalled that supply chain woes continued to hamper capacity, however, and pushed firms to turn to safety stock building again as lead times for materials worsened,” Jones stated. 

Czech manufacturers were also more upbeat in August amid expectations of stronger demand conditions and investment activity.

"Despite balance sheet strain and supply challenges, manufacturers were the most confident in the outlook for output over the coming year since March," Jones concluded.