Czech industrial production up ‘surprising’ 2.2 pct y/y in April

The biggest contribution to growth came from the manufacturing of vehicles, which increased 8.3% year on year, the ČSÚ said

Economy
Brian Kenety | 06.06.2012

Industrial output increased 2.2 percent year on year (y/y) in April, after a revised 0.1 percent growth rate in March, the Czech Statistical Office (ČSÚ) said Wednesday, beating market expectations.

Komerční banka analyst Miroslav Frayer said that while the result was in line with the bank’s estimate, compared with the market consensus came as a “positive surprise.” A Bloomberg survey of 15 analysts had put the median forecast at 1.2%.

“Foreign demand was behind the relatively decent result. Sales from industrial activity grew overall 2.7% y/y; direct export sales were 4.2% higher, while domestic ones recorded growth of only 1.2%,” Frayer said in a note.

“A visible difference is apparent when looking at data on the value of new orders, which rose only 0.4%. Foreign orders rose 7.5% while domestic ones dropped markedly 11.6%,” he said.

The biggest contribution to growth came from the manufacturing of vehicles, which increased 8.3% y/y, the ČSÚ said. However, the outlook is not very favorable, according to Komerční banka.

“Catastrophic macroeconomic scenarios fromend-2011 are not being fulfilled, but German orders, the decline in new car registrations in the euro area and European leading PMI indicators (including for the Czech Republic) do not provide much optimism,” Frayer said. “For the whole of this year, we expect industry to rise 1.7% after 7.1% last year.” 

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