Czech industrial output surges with recovery sucking in imports
Czech industrial production is going from strength to strength and there are now clear signs that bosses are recruiting seriously to cover their ever expanding order books.
The usual suspect, car production, led the charge with significant increases also for production of metal, plastic, and rubber products but drops for machinery and equipment and power production.
What is more encouraging for the future months is the strengthening order books for companies in February. Across the whole of industry, they were 19.9% higher than at this point last year. Exports continued to account for most of the new orders, they were up 23 percent year on year, but domestic orders also played an important role, up 14.1 percent.
As well as the transport and metal products sectors, long suffering computer, electronics, and optical companies, who were badly affected by the recession, can also look forward to higher output in the near future thanks to new orders flowing in.
On the employment front, the number of those working in industrial firms with more than 50 workers rose by 1.1% compared with February 2013.
Over the last six months a clear rebound is apparent in industrial employment with the turning point coming in December when there was a 0.1 percent rise in industrial jobs. The increase continued in January with a 0.6 percent rise with the latest monthly figure even firmer. Industrial production has been growing since mid-2013, though the initial rise was still accompanied by job losses as bosses were still fixed on cost cutting and were yet to be convinced that the corner had been turned.
Analysts point to the fact that productivity is now rising even faster, at 5.5 percent, than the pick- up in new jobs with real wage costs at the same time falling by 1.8 percent. The picture that portrays is of increased competitiveness with some of the slack in industrial firms still being taken up and most of the extra production still coming from overtime, or other measures, by the existing workforce, but with these now reaching their limits.
The Czech Statistics Office also published trade figures for February on Monday. The raw figures are a 13.6 billion surplus, slimmed down to the tune of 2.8 billion on the figure a year earlier. Much of the slimming was due to the higher costs of imported fuel. The Czech Republic continues to accumulate a very healthy trade balance with the rest of the European Union but runs a deficit, albeit smaller, with the rest of the world.
Overall, the statistics office remarks a trend of increased exports being outpaced by even higher increases in imports. That trend is not a surprise and underpins the impression that economic recovery is firmly underway. Economic analysts had predicted that recovery would pull in more imports as much of the new equipment needed to boost productivity would have to be sourced outside the Czech Republic.
