Czech Republic PMI February 2016

Czech Republic

Czech Republic: Manufacturing PMI moderates in February

March 1, 2016

In February, the manufacturing Purchasing Managers’ Index (PMI), elaborated by Markit, fell from January’s 56.9 to 55.5. The reading represents a first moderation after three increases. Nevertheless, the manufacturing PMI remained above the 50-long-term average that indicates expansion in the manufacturing sector, where it has been since May 2013.

February’s setback reflects that output, new orders, exports, purchasing activity and employment all expanded at a somewhat slower pace than in January. Notwithstanding, according to the survey report, the growth rates of these components still remained solid and above their respective long-term averages. Regarding prices developments, input prices recorded the steepest drop since 2009 and firms made the largest cut to output charges in over two years.

Markit commented that, “although the Czech PMI eased to a three-month low in February, manufacturing growth in the country remains stronger than that seen in the Eurozone, based on the earlier flash reading for goods producers in the single currency area (51.0). New orders posted the second-fastest rise in the past seven months and backlogs continued to grow solidly. The latest survey data therefore suggest that the unexpected weakness in official industry output data for December will prove temporary, although the longer term outlook will be closely linked to developments in the wider European and global economies.”

FocusEconomics Consensus Forecast participants see fixed investment increasing 3.4% in 2016, which is unchanged from last month’s projection. For 2017, panelists expect fixed investment to expand 3.7%.

Author: Teresa Kersting, Economist

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Czech Republic PMI Chart

Czech Republic PMI February 2016

Note: Markit Manufacturing Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit.

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