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Czech industrial production fell by 1.9% year-on-year and by 0.8% month-on-month in July in what is a fifth monthly drop in a row, though the pace of decline softened on the -3.3% y/y in June.
The value of new orders in the industry fell by 1.8% y/y, with non-domestic new orders dropping by 2% y/y and domestic ones by 1.5%.
“Industrial production mainly decreased due to a shift of company holidays in enterprises manufacturing motor vehicles. On the other hand, many economic industries, for example, manufacture of food products, reported y/y growth,” commented Radek Matejka of CZSO.
The overall y/y drop in the value of new orders “was most influenced by car production”, Veronika Dolezalova, Head of the CZSO’s Industrial Statistics Unit stated, noting that “new industrial orders increased y/y in most of the surveyed industrial economic activities”.
Analysts surveyed by Czech Television (CT) continue to warn about the unconvincing shape of Czech industry which is pressured by the weak-performing German economy, a key export destination for the Czech industry.
“For the whole of this year industrial production will remain in red numbers and will register a drop of 0.5%,” Vit Hradil, analyst at Cyrrus consulting company, forecasted, while agreeing that holidays at automobile plants affected the whole industry.
“If we scrapped the automobiles [plants] altogether, the industrial production would have increased by 1.2%,” he was also quoted as saying by CT.
The Czech Statistical Office (CZSO) also reported on the return to growth in the construction sector and a deficit in the international trade balance of goods.
Construction output increased by 2% y/y and by 6.9% m/m, ending four months of a consecutive y/y skid. “The [July] growth was driven by engineering construction. Building construction remained slightly under the level of July 2023,” commented Matejka. Market analysts credited large infrastructure projects, including highway and energy construction sites, for the return to growth.
The approximate value of permitted constructions dropped by 2.1% and the number of started dwellings by 5.5% y/y. The number of completed dwellings fell by 7.2%. Building construction fell by 0.9%, while civil engineering construction went up by 7.1%.
The international trade balance of goods ended in a deficit of CZK4.1bn (€164mn) in July after a 10-month-long run of registering a surplus.
“The value of imports exceeded the export side, also because exports of motor vehicles and their parts stagnated mainly due to the factory holidays, while the import side was boosted by computers, electronic and optical equipment,” Miluse Kavenova of CZSO stated.
Exports increased by 12.2% y/y to CZK355.8bn, while imports went up by 11.3% to CZK359.9bn. In m/m terms, exports decreased by 4% and imports by 1.2%.
Electrical equipment exports improved by CZK5.3bn y/y, while the surplus in machinery and equipment increased by CZK2.4bn and motor vehicles by 1.7bn.
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