Exports Fall On Labour Shortages, Market Saturation

Czech Industry and Trade Ministry

Prague, Aug 7 (CTK) – Czech exports have been pulled down by a shortage of labour and the fact that the European car market has reached saturation point, analysts polled by CTK have said.


Exporters are no longer able to get new orders as they lack workers to raise their production and new employees are not available in the market, they said.


Export growth will be near zero in the coming months, they added.


European demand for cars has been falling in recent months, which also affects domestic car manufactures, said Raiffeisenbank analyst Jakub Cervenka.


Improvement in trade in computers and electronics, on the other hand, had a positive impact on the overall trade balance, he said.


Unlike in the past two years, foreign trade will not be a Czech economy driver this year, economists said.


“Industrial production and foreign trade have reached their limits, with sales limits being used up as well,” said Cyrrus chief analyst Lukas Kovanda.


June’s exports reached nearly Kc315bn, which was the highest level this year.


It is a modest rise in yr/yr terms, and it was a positive piece of news as the foreign trade growth has slowed down since the beginning of the year, said ING Bank chief economist Jakub Seidler.


Thanks to the higher figure in June, the first-half exports have reached a similar level as last year, which was a record year, he said.


Rising incomes of Czech households are raising demand for foreign goods. “That is why imports are growing markedly faster than exports, which has a negative effect on the overall foreign trade balance,” said BH Securities chief economist Stepan Krecek.


Czech firms should focus more on the needs of the domestic market and take advantage of the population’s higher purchasing power to develop new products and services, Krecek added.


Imports will also outpace exports in the following months, said Akcenta analyst Miroslav Novak. Foreign trade surplus will be some Kc120-130bn this year, against Kc149bn last year, he said.


Czech exports grew by an annual rate of 0.8 percent and imports by 2 percent in June, with the foreign trade surplus falling by Kc3.5bn to Kc15.8bn, according to preliminary results made public by statisticians today.