Czech Manufacturing Output Jumps In April

Construction production in the Czech Republic is still failing to start growth. In April, it fell by 3.9 percent year on year, while in March, the decline was 3.3 percent, according to revised data. Construction output also fell month-on-month, by 1.3 percent. The Czech Republic’s foreign trade ended April with a surplus of CZK 19.3 billion, a year-on-year result of 43.6 billion. Manufacturing in the Czech Republic rose by 55.1 percent year on year in April, which is the highest so far. Car production increased almost four and a half times. Last April, however, the industry was severely curtailed by government measures against the spread of coronavirus, as well as voluntary interruptions in production, for example in car manufacturers.

Construction down 3.9 percent year on year

Construction production in the Czech Republic is still failing to start growth. In April, it fell by 3.9 percent year on year, while in March, the decline was 3.3 percent, according to revised data. Construction output also fell month-on-month, by 1.3 percent. As in previous months, the reduction in April was due to building construction, which includes the construction of flats, offices or warehouses. Civil engineering, especially transport construction, has stagnated compared to April last year.

Construction output fell by 3.9 percent year on year in April due to developments in building construction. Civil engineering was at a high level last April,” said Radek Matějka, director of the CZSO’s Statistics on Agriculture and Forestry, Industry, Construction and Energy.

Construction production may have been partly affected by adverse weather conditions. “April was strongly below normal and during cold days precipitation also fell in the form of snow,” said Petra Cuřínová, head of the CZSO’s construction and housing construction statistics department.

Statistics fell in all four months of this year – most in February, when the decline was almost 11 percent, the most significant year-on-year decline since July 2016. Production in construction fell for most of last year, growing only in January to March. Just last March, an epidemic of covid-19 broke out in the Czech Republic, due to which the movement of people, trade and services has been significantly restricted since then.

Compared to the same month last year, production in building construction decreased by 5.4 percent in April this year, after adjusting for working days, while civil engineering decreased by 0.3 percent year-on-year.

According to statisticians, the area of building permits and housing construction was partly affected by the low base from April 2020, when, due to the epidemic, it struggled with limited activities of some building authorities and reduced interest from builders. In April this year, building authorities issued 13.5 percent more building permits year-on-year, their indicative value increased by 8.8 percent and reached 37.6 billion crowns.

Year-on-year, 6.6 percent more dwellings were started and 57.4 percent more dwellings were completed. The construction of 3589 flats began, the flats were completed in April.

The average registered number of employees in the construction industry decreased by 1.4 percent year-on-year in April this year, their average gross monthly wage increased by 9.8 percent compared to last April. The growth of the average wage was influenced not only by the payment of annual bonuses, but also by the low base from last April. At that time, some medium-sized and smaller companies worked in a limited regime and their employees took sick, nursing or unpaid leave, the CZSO added.

Manufacturing grew by 55 percent

Industrial production in the Czech Republic rose by a record 55.1 percent year on year in April. Car production increased almost four and a half times. Last April, however, the industry was severely curtailed by government measures against the spread of coronavirus, as well as voluntary interruptions in production, for example in car manufacturers. Compared to March, production increased by 1.9 percent.

“Due to last year’s lockdown, the growth in industrial production in April reached historic levels,” said Radek Matějka, director of the CZSO’s Statistics on Agriculture and Forestry, Industry, Construction and Energy. According to him, industrial production is approaching its current maximum from 2019.

More than half of the year-on-year increase in industrial production is significantly higher than the revised increase of 14.1 percent in March. However, due to last year’s effects of the epidemic, the March increase was already one of the highest since 2001, reaching the current statistical series.

Vehicle production in April rose by 446.5 percent year on year. “The automotive industry is in full swing despite the worldwide shortage of some components, and thus the downstream industry is also thriving,” said Veronika Doležalová, head of the CZSO industry statistics department. Rubber production increased by more than 100 percent, the production of electrical equipment increased by almost two thirds. Production fell by only 2.5 percent in the clothing industry.

The value of new orders is also growing. In April, it rose by 90 percent year on year. Orders from abroad almost doubled, rising by three quarters from the domestic market. Orders increased mainly in the automotive industry. Revenues from industrial activity at current prices rose by 63.5 percent year on year in April.

The number of employees in industry decreased by two percent in April compared to last year. Their average wage increased by more than 11 percent, which, according to the CZSO, is also due to a comparison with low levels from last year.

Foreign trade surplus of CZK 19.3 billion

The Czech Republic’s foreign trade ended April with a surplus of 19.3 billion crowns, which was CZK 43.6 billion better year-on-year. According to him, the result was affected by the low comparison base last April, when the restrictions adopted in connection with the spread of coronavirus applied. It was positively affected mainly by the year-on-year higher trade surplus in motor vehicles.

In April, exports rose by 78.3 percent year on year to CZK 348.2 billion and imports by 49.8 percent to CZK 328.8 billion. “Significantly better year-on-year results in foreign trade in goods are largely due to a low base effect. April was the weakest month in terms of trade balance last year,” said Stanislav Konvička, head of the CZSO trade balance department. According to him, the automotive industry in particular was practically paralyzed a year ago, on the other hand, it is now doing better, which was especially evident in the export of cars and their parts.

The surplus of car trade increased by CZK 44.4 billion year-on-year, mainly due to an increase in their exports by CZK 79.8 billion. Trading in computers, electronic and optical instruments also had a positive effect on the April result of foreign trade, the balance of which improved by CZK 4.8 billion due to the shift from liabilities to assets. A similar improvement of three billion was recorded in the textile trade.

On the other hand, the overall balance was negatively affected by a larger deficit in trade in basic metals, oil and natural gas, and chemicals. The deficit in base metals increased by 5.6 billion year on year, increased by CZK 4.8 billion for oil and natural gas and by CZK 4.2 billion for chemicals.

In April, the Czech Republic’s trade surplus with the European Union increased by CZK 42.3 billion year-on-year to CZK 68.8 billion. The largest increase in assets was recorded in trade with Germany, where it rose by 14 billion. With France, the surplus increased by 6.9 billion and with Slovakia by 5.2 billion.

The foreign trade deficit in goods with non-EU countries decreased by CZK 2.1 billion year on year to CZK 47.5 billion. Statisticians said that the trade surplus with the United Kingdom in particular increased by CZK 4.7 billion. On the other hand, the trade deficit with Japan increased by 2.8 billion and the trade balance with Kazakhstan deteriorated by two billion crowns with the transition from assets to liabilities.