The Czech IHS Manufacturing Purchasing Managers Index (PMI) decreased to its lowest level since December 2012, to 47.3 in March from 48.6 in February, signalling a solid deterioration in operation conditions of the Czech manufacturing sector, according to a report from IHS Markit published on April 1.
The fifth monthly decline in new business was the fastest since October 2012, with a drop in foreign demand.
”The Czech manufacturing sector finished the first quarter of 2019 on a more negative note, with solid contractions in output and new orders. Operating conditions deteriorated at the fastest rate for over six years as the quickest fall in new export orders since June 2009 added to manufacturers' woes,“ said the Economist at IHS Markit Sian Jones.
Manufacturers' output expectations for 2019 remained muted for both domestic and foreign clients based on weaker demand. The pace of contraction in new export orders increased and was the quickest for nearly ten years.
The producers registered a fall in employment due to difficulties finding skilled staff as well as the first decline since November 2016 in backlogs. “Firms signalled little strain on capacity as both employment and backlogs declined. The decrease in working-hand was the first such monthly fall since November 2016 amid weaker domestic and foreign client demand,” Jones added.
Manufacturers recorded the sharpest fall in input purchasing and stocks of purchases since the end of 2012. “Consistent with the recently conducted IHS Markit Czech Business Outlook survey, goods producers expressed the weakest degree of confidence since late-2012, with firms highlighting concerns surrounding more subdued underlying demand and difficulties finding qualified staff,“ he concluded.