Czech Republic: Manufacturing PMI drops in February
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) dropped to 56.5 in February from January’s 59.0. Therefore, the index remained comfortably above the 50-threshold, signaling another strong, albeit more moderate, improvement in business conditions from the previous month.
February’s reading chiefly reflected softer increases in output and new orders, which nevertheless continued to expand sharply. Moreover, the pace of job creation and purchasing activity also moderated. On the price front, input costs continued to rise robustly amid higher costs for energy and oil-related goods, although the pace of increase softened to a one-year low. Output cost inflation decelerated in turn, logging an eight-month low increase. Lastly, sentiment regarding the outlook was the strongest since April 2018 amid optimistic projections for order book growth and hopes of a further easing of supply constraints.
Commenting on the release, Phil Smith, senior economist at IHS Markit, stated:
“The survey showed some disruption to production from Omicron as staff absences weighed on capacity, but increased demand for goods nevertheless provided a strong enough tailwind to maintain momentum, with the manufacturing sector still on course to make a positive contribution to economic growth in the first quarter.”