Fall in industrial output slows after resumption of auto production

Photo: Josef Kopecký / Czech Radio

A year-on-year fall in industrial output in the Czech Republic slowed last month, according to official figures released on Thursday. After decelerating by 25.7 percent in May, in June the slowdown was 11.9 percent.

In month-on-month terms, industrial production was 13.4 higher in the sixth month of the year, the Czech Statistics Office said.

The situation in Czech industry began stabilising in June after the sharp downturn sparked by the coronavirus crisis, which first hit the country three months earlier.

Radek Matějka of the Czech Statistics Office said that output had begun to return to pre-pandemic levels at a number of industrial companies.

The improvement on the figures for May was chiefly thanks to the renewal of car production, which is a major engine of the Czech economy, and that was also good news for auto parts manufacturers.

However, despite the recovery, the production of motor vehicles, trailers and semi-trailers was still down 14.3 percent year-on-year in June.

Photo: Michael Gaida,  Pixabay / CC0

Production of machinery and equipment was 22.6 percent lower than in the same month in 2019. In metal structures and metal products manufacturing, the statisticians recorded a decline of 13 percent.

By contrast, pharmaceutical producers saw output rise by almost 18 percent. Companies in the wood processing sector and other processing industries also performed better year-on-year in June.

The value of new orders in June declined by 3.4 percent compared to the same month last year. New orders from abroad decreased by 0.1 percent, while domestic new orders fell by 10.3 percent.

The decline in orders was most keenly felt by machinery and equipment manufacturers, along with metallurgical and metal-working companies. By contrast, automotive and pharmaceutical firms secured more new orders year-on-year.

Meanwhile, the decline in construction production in the Czech Republic accelerated again, falling by 11.5 percent year-on-year in real terms in June, after a 7.7 percent decline in May.

Building construction – including the construction of apartments, offices and warehouses – fell once again. Civil engineering works also recorded worse results, mainly in the area of transport infrastructure.

Analysts say the construction industry lags behind other economic indicators and don’t rule out an even deeper decline down the line.

Building construction output in June decreased by 14.7 percent compared to the same month in 2019. In civil engineering, output was lower by 3.2 percent year-on-year; it had risen by 1.1 percent in May and 13.5 percent in April

The country’s building authorities issued 6.8 percent more permits year-on-year the month before last. However, in a year-on-year comparison, construction began work on fewer dwellings and nearly 20 percent fewer were completed.