The seasonally adjusted Czech Republic Manufacturing Purchasing Managers’ Index (PMI) posted 42.0 in October, still indicating a monthly deterioration.
The September figure is slightly better from 41.7 in September but remains well below the 50 mark, separating growth and decline, and the downturn was among the steepest this year.
“The Czech manufacturing sector saw little change in the landscape during October, as output, new orders and employment contracted further,” commented Sian Jones, principal economist at S&P Global Market Intelligence.
“Employment was cut at the second-fastest pace since the initial stages of the pandemic,” Jones pointed out, adding that “firms downgraded optimism to the lowest in 2023 to date” amid “weak domestic and foreign client demand.”
S&P report also noted that new sales fell at one of the sharpest rates in three-and-a-half years and that operating expenses declined for the eighth month in a row.
Producers reduced their selling prices in response to a drop in costs, including decreasing energy and material expenses. Output charges fell at the quickest rate since June 2009, S&P pointed out.
Jones projected Czech National Bank (CNB) “to begin cutting interest rates at their November meeting amid downward pressure on prices.”