Industrial Output Accelerates 3.4% In June

Prague, Aug 6 (CTK) – Czech industrial output accelerated its yr/yr rise to 3.4 percent in June from May’s 1.4 percent thanks to energy and engineering industries, the Czech Statistical Office (CSU) said today.


Adjusted for seasonal effects, industrial output went up by 1.5 percent in mth/mth terms.


The value of new orders in selected branches posted an annual increase of 5.1 percent. Growth was mainly seen for manufacture of other transport equipment, manufacture of fabricated metal products and manufacture of machinery and equipment. New orders abroad saw a marked increase.


Sales from industrial activity were 2.6 percent higher.


Electricity, gas, steam and air conditioning supply grew by 16.4 percent in annual terms, manufacture of machinery and equipment was 6.6 percent higher and manufacture of electrical equipment saw a rise of 6.4 percent, the CSU said.


Conversely, the segment of repair and installation of machinery and equipment registered an annual drop of 5.4 percent, with manufacture of rubber and plastic products sinking by 1 percent.


June this year was one working day shorter in annual terms, with industry posting an annual hike of 6.9 percent in real terms adjusted for this effect.


The average registered number of employees in industrial enterprises with 50+ employees was 1.4 percent higher in yr/yr comparison. Their average gross monthly nominal wage increased by 7.4 percent to Kc33,341, statisticians said.


The wage growth data show that employers are fighting for employees, said Komercni banka economist Viktor Zeisel.


BH Securities chief economist Stepan Krecek said low value added activities are moving to the east of Europe because of that.


With fast-growing real wages and a shortage of labour, sustainable competitiveness will be a great challenge for industry, said Raiffeisenbank analyst Frantisek Taborsky.


“A weaker foreign demand and lifting of domestic interest rates will pose a risk, the latter to be reflected in higher loan costs,” he said.


Industry will be doing well in the months to come given the growth in orders, analysts said.


“Industry can be the driver of the economy also in the second half of the year that will apparently be somewhat weaker than the first half-yearly period but still it will post very good results compared to the west of the EU. The main problem will not be demand but the lack of employees,” said CSOB analyst Petr Dufek.


ING Banka economist Jakub Seidler said the domestic industry may rise by about 3 percent this year. “In the context of the most recent data and fears of trade disputes escalation, it would be a positive result,” he said.