Czech industry at six year growth record

Illustrative photo: archive of Czech Government

The Czech Republic’s manufacturing sector shows the most significant growth in more than six years, according to a report by IHS Markit released on Wednesday.

Illustrative photo: archive of Czech Government
The Purchasing Managers’ Index (PMI), a reflection of the state of confidence in the manufacturing sector, increased to 58.5 points in October from September’s 56.6 points. A score above 50 points indicates an overall improvement of the sector.

“October’s survey data showed the biggest improvement in operating conditions in production since April 2011. The increase in new orders was also the fastest since May 2014,” said IHS Markit’s Sian Jones.

According to the survey, the level of production among Czech manufacturers increased in October at the fastest rate in four months. Together with higher production, new and export orders marked a significant rise as well.

Analysts expect industry to continue its turbo performance for the rest of this year. Eurozone GDP figures released on Tuesday showed foreign demand is still strong. New orders from both domestic and foreign clients grew at the fastest rate since May 2014.

Komerční banka’s economist Viktor Zeisel expects industry output to accelerate significantly in the autumn months. He says the positive outlook will also motivate businesses to make further investments and increase domestic productivity.

“Domestic industry will therefore try to cope with the declining supply of labour and increase its wage bill. Thanks to industry, the Czech economy will add 4.4 percent growth this year, and its dynamics will reach 3.6 percent next year,” he told Czech Television.