Czech Republic: Czech manufacturing sector faces downturn amid inflation
The S&P Global Czech Republic Manufacturing Purchasing Managers’ Index (PMI) fell to 44.7 in April from 46.2 in March. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing sector operating conditions compared to the previous month.
April’s downturn in the Czech manufacturing sector was primarily driven by stronger contractions in production and new orders, alongside a sharper fall in employment due to softer expectations for future output.
Inflationary pressures in the Czech manufacturing sector intensified, with a third consecutive monthly increase in input costs, largely due to higher energy and food prices and unfavorable exchange rate movements against the Euro. This led firms to raise their output charges for the first time in a year. Meanwhile, business sentiment dipped slightly from March’s high, despite being the second-highest in two years, with firms hopeful for a rebound in client demand.