Industrial Output Growth Strongest Since 2017

Prague, Sept 6 (CTK) – The July growth in the Czech Republic’s industrial output is the strongest since last October, however, it was impacted by a bigger number of working days, timing of holidays, and 2017’s power cuts, analysts approached by CTK said today.


Despite the reasons of the rise, data published by the Czech Statistical Office (CSU) confirm the economy’s good condition, experts said.


Czech industrial production accelerated year-on-year growth to 10.3 percent in July from June’s 3.1 percent, and seasonally adjusted output was 6.7 percent higher, the CSU said today.


The growth was aided by all the sectors, Raiffeisenbank analyst Frantisek Taborsky said.


The annual dynamics was impacted by a double-digit rise in electricity output, ING Bank analyst Jakub Seidler said.


The increase was caused by last year’s low comparison basis as units 3 and 4 of Dukovany nuclear power plant were off in July 2017. Electricity production accelerated annual growth to 23.4 percent, Seidler said.


Today’s data affirmed that the mood is still optimistic in industry, Komercni banka analyst Monika Junicke said.


Leading indicators stay around their highest levels, which means industry is likely to continue developing positively.


The largest obstacle is a lack of workers, however, companies managed to fill vacancies thanks to an inflow of graduates during the summer months. Another problem is a rise in costs of both employees, with wages growing quickly, and input material, Junicke said.


A rise in orders likely continued in August despite full capacities and shortage of employees, based on purchasing managers’ indexes, CSOB analyst Petr Dufek said.


The industry data might be an argument for another interest rates hike made by the Czech National Bank (CNB), he added.