Czech Republic PMI January 2019

Czech Republic

Czech Republic: Manufacturing PMI dips to six-year low in January

February 1, 2019

The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit dipped from 49.7 in December to 49.0 in January, marking the second consecutive monthly contraction of the all-important sector and hitting a six-year low. Consequently, the index moved further below the critical 50-point mark separating expansion from contraction in activity in the manufacturing sector.

January’s downturn reflected a decline in output, new orders and employment. Production fell for the second month in a row while new orders dipped due to a loss of competitiveness and muted demand from key trading partners amid ongoing trade tensions. As a result, manufacturers reduced their staff levels in January, the first time in nearly six years, although only marginally. On the price front, input costs continued to rise sharply, reflecting higher energy and chemical prices, but the pace of increase was the slowest in 17 months. Nevertheless, output charge inflation picked up to a three-month high. Lastly, optimism among firms remained weak, dropping to the second-lowest level in over six years due to concerns over world trade tensions and demand from the automotive sector.

Czech Republic Fixed Investment Forecast

FocusEconomics Consensus Forecast participants see fixed investment increasing 4.3% in 2019, which is up 0.1 percentage points from last month’s projection. For 2020, panelists expect fixed investment to expand 3.4%.

Author:, Economist

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Czech Republic PMI Chart

CzechRepublic PMI January 2019

Note: IHS 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: IHS Markit.

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