Czech Republic: Manufacturing PMI drifts higher in June but remains weak on continued Covid-19 woes
July 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 44.9 in June from 39.6 in May. Despite the increase, however, the index remained below the critical 50-mark separating deterioration from improvement in the health of the manufacturing sector, where it has been for over a year.
June’s climb was driven by less pronounced falls in production and new orders as some factories began to reopen from the Covid-19 induced shutdown and processed backlogs. That said, the demand environment remained extremely challenging, leading manufacturers to reduce their staffing levels further in June. On the price front, although input cost inflation picked up, goods producers lowered selling prices again amid weak client demand. Lastly, business sentiment turned positive for the first time in four months on hopes of higher output ahead.
Author: Javier Colato, Economist