Czech Republic PMI May 2020

Czech Republic

Czech Republic: Manufacturing PMI climbs but remains deep in the red on continued Covid-19 impact

June 1, 2020

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, crawled back up to 39.6 in May from 35.1 April, which had marked the lowest reading in over a decade. Despite the increase, however, the index remained well below the critical 50-mark separating deterioration from improvement in the health of the manufacturing sector, where it has been for over a year.

May’s climb was driven by less pronounced declines in production and new orders; that said, the falls were still steep as the Covid-19 pandemic continued to subdue demand, which also weighed on export orders, particularly in the key automotive segment. Amid weak demand, excess capacity and business pessimism regarding the future, manufacturers cut employment once again, and at the second-fastest clip since mid-2009. On the price front, goods producers lowered their selling prices again in a bid to attract customers, while input cost inflation eased. Lastly, business confidence remained downbeat, with concerns persisting over the duration of current conditions before they improve.

FocusEconomics Consensus Forecast participants see fixed investment contracting 10.1% in 2020, which is down 4.2 percentage points from last month’s projection, before growing 5.1% in 2021.

Author:, Economist

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Czech Republic PMI Chart

Czech Republic PMI May 20 20

Source: IHS Markit Manufacturing Purchasing Managers’ Index (PMI). A reading above 50 indicates an improvement in operating conditions while a value below 50 points to a deterioration.

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