Czech Republic PMI October 2021

Czech Republic

Czech Republic: Manufacturing PMI falls in October amid supply shortages and elevated inflation

November 3, 2021

The IHS Markit Manufacturing Purchasing Managers' Index (PMI) dropped to 55.1 in October from September's 58.0. That said, the index remained entrenched above the 50-threshold, signaling a continued improvement in business conditions from the previous month.

October’s reading chiefly reflected the first contraction in output since June 2020 as well as the first decrease in new orders in over a year, amid protracted capacity and material shortages. Meanwhile, companies continued to hire additional staff, although they did so at the softest level in nine months. On the price front, both input and output cost inflation accelerated, fueled by persisting supply-chain disruptions.

Commenting on the release, Siân Jones, senior economist at IHS Markit, stated:

“According to firms, there were instances of factory shutdowns as businesses were unable to secure the necessary components for production. This had a knock-on effect on sales, as clients had to postpone or cancel orders. Unsurprisingly, these problems were particularly acute for the automotive sect. […] Overall, it's clear that momentum in the Czech manufacturing sector is waning.”

FocusEconomics Consensus Forecast participants see fixed investment growing 7.0% in 2022, which is up 0.8 percentage points from last month’s projection, and expanding 4.8% in 2023.

Author: Massimo Bassetti, Senior Economist

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Czech Republic PMI Chart

Czech Republic PMI October 2021 2

Note: 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.
Source: IHS Markit.

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