Czech Republic PMI August 2018

Czech Republic

Czech Republic: Manufacturing PMI drops to one-year low in August

September 3, 2018

The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit fell slightly from 55.4 in July to 54.9 in August, a one-year low. Nonetheless, the PMI remained firmly above the critical 50-point mark separating expansion from contraction in activity in the manufacturing sector.

August’s dip largely reflected slower growth in output and new business orders. Both production and new orders growth moderated to one-year lows; nevertheless, their pace of expansion remained solid. As output growth outpaced that of new orders, accumulation of backlogs of work moderated in August, rising at the slowest clip since December 2016. On a positive note, employment growth picked up from July, as vacancies were gradually filled. On the price front, input inflation accelerated to the second-fastest rate in nearly a year, reflecting higher raw material prices—particularly of steel—and exchange rate movements. Firms were able to pass only part of these higher costs onto customers, however. Lastly, optimism among firms weakened to its lowest in nearly two years, albeit remains strongly positive.

Czech Republic Fixed Investment Forecast

FocusEconomics Consensus Forecast participants see fixed investment increasing 6.6% in 2018, which is unchanged from last month’s projection. For 2019, panelists expect fixed investment to expand 3.9%.

Author:, Economist

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Czech Republic PMI Chart

CzechRepublic PMI August 2018

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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