In Business News this week: confidence creeps upwards; Ostrava steel battle escalates; massive server order for Czech plant; business press empire suffers downturn; and bank governor bares fundamentals at farewell address.
Economic confidence edges upwards
Photo: archive of Radio Prague
Czech confidence in the economic future increased slightly in June from May. The composite confidence indicator put together by the Czech Statistical Office rose to 91.1 points in June from 90.1 points in May. That rise was based on consumers’ expectations about a rosier economic future, although most of them expected their personal financial positions to worsen. Business confidence slipped slightly with drops in all sectors apart from industry.
Steel battle culminates with threat to cancel deliveries
A battle between two of the country’s biggest steel companies has come to a head with Evraz Steel Vítkovice cancelling its order for pig iron deliveries from fellow Ostrava company ArcelorMittal. The step follows weeks of haggling over the prices it pays for the basic commodity. Those deliveries represent a quarter of ArcelorMittal’s overall production but the company says it will seek to take up the slack and not lay off any workers. Russian steel and mining group Evraz has threatened to close the Czech steel plant, which mainly produces steel slabs, plates and sections, if it cannot cut costs.
Hewlett Packard places major server order with Czech plant
Illustrative photo
A Czech factory has been given the contract to produce servers and data boxes for global computer hardware and service company Hewlett Packard. The order to make around a million servers a year for the whole of Europe has been given to Hewlett Packard’s long time production partner Foxconn and its Kutná Hora plant. Around 700 jobs should be created, with the company saying that high value production and not just assembly will be involved. Foxconn is already the fifth biggest company in the Czech Republic based on turnover and second biggest exporter.
Czech business media empire suffers 2009 loss
Business has not been good for the biggest Czech publisher of mainstream and specialist business publications, Economia. The publisher of the business daily Hospodářské noviny and a swathe of specialist business magazines, covering everything from waste to media and marketing, plunged to a 136 million crown loss in 2009 after a 100 million crown profit a year earlier. The results reflect a sharp drop in advertising revenue, but the company says that its basic economic foundations are sound. Economia is indirectly controlled by Czech mining boss Zdeněk Bakala.
Central bank governor bares economic fundamentals
Zdeněk Tůma, photo: CTK
It is not perhaps every day that a central bank governor opens his jacket and flashes a t-shirt with a graph of interest rate development over the last decade. That was, however, the case of Czech central bank boss Zdeněk Tůma at his last news conference in the post before stepping down on June 30. The t-shirt was a present from colleagues — and, apart from downward interest rates, Mr. Tůma has a lot to be proud of. This includes making the bank a more open institution and giving it a more solid role with long-term inflation targeting and exchange rate forecasts. He was given a round of applause as he left the post but is expected to pop up again in some other top flight economic job fairly soon.
