Business News

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In Business News this week: the profits of large industrial companies in the Czech Republic grow by 31 percent; the country falls in an international Doing Business survey - and is warned to reform its tax and legal systems; most construction firms in the Czech Republic admit to hiring illegal workers; Czechs get paid the second most per hour of all the countries which have joined the EU since 2004; and Skoda Auto opens the country's biggest company educational complex in Mlada Boleslav.

Industrial companies see healthy increase in profits

Profits of large industrial companies in the Czech Republic grew by an impressive 31 percent last year, says a new study released by the Czech Statistical Office this week. That growth has been attributed to an increase in foreign investment, a focus on production with higher added value, and a growth in exports; in fact, almost 50 percent of industrial production was exported in 2006. While metallurgy made up the biggest slice of the industrial sector in the year 2000 with 16 percent, in 2006 the car industry dominated, with 20 percent. The new report says growth in Czech industry (which, by the way, employs almost a third of the workforce) should continue.

Czech Republic told to make doing business easier

But it hasn't all been good news this week. If the Czech Republic doesn't make its taxation system simpler and reform its legal system it will become a less attractive country in which to run a business. That's according to the latest international Doing Business survey carried out for the World Bank by the International Finance Corporation, and quoted in Thursday's Lidove noviny. The Czech Republic fell four places in the latest study to 56th among 178 states when it comes to conditions for setting up, running and closing down companies. Neighbouring Slovakia was ranked considerably better, in 32nd place.

Three-quarters of construction firms admit to hiring illegal workers

Three-quarters of the Czech Republic's construction firms admit to employing workers illegally, according to a survey by KPMG quoted in Lidove noviny. Labour Ministry figures suggest that 37 percent of workers in this country don't have permits - and most such illegals work in building. One analyst told Lidove noviny that construction firms don't just hire foreigners without papers to save money - they simply can't find qualified Czech employees.

Czechs second highest earners among EU states while gap with west narrows

Czechs earn the second most per hour of all the countries which joined the European Union in 2004, according to the Czech Statistical Office. Only the Slovenians earn more. The average Czech received CZK 109 (USD 5.58) an hour in 2006. That lags far behind western European wages, but the gap is narrowing. In real terms Czech salaries increased by 35 percent in the 2000-2006 period, compared to 2 percent in neighbouring Germany.

Skoda opens "university" for employees

Skoda Auto has opened its own "university" to educate both current staff and future employees. It has a capacity for 800 students and is located near the firm's main production plant in Mlada Boleslav. Skoda's senior HR manager Martin Jahn says the new centre is the biggest company educational complex in the Czech Republic. The college charges fees of around CZK 30,000 a year (around USD 1,500), which Skoda will subsidise.