Czech Republic PMI June 2022

Czech Republic

Czech Republic: Manufacturing PMI falls into contractionary terrain in June

July 1, 2022

The S&P Global Manufacturing Purchasing Managers' Index (PMI) dropped from May's 52.3 to 49.0 in June, the lowest value since August 2020. Consequently, the index moved below the critical 50-point threshold that separates an expansion from a contraction in manufacturing sector activity compared to the prior month.

June’s reading chiefly reflected a faster fall in new orders, a slight contraction in output and job shedding. Meanwhile, backlogs of work decreased for the first time since October 2020. On the price front, input costs continued to increase amid soaring energy costs — albeit at the slowest rate in 16 months. Consequently, output prices rose at a more moderate, albeit still robust, pace. Lastly, output expectations fell to their second-lowest level in two years, weighed down by concerns about inflation and consumer spending.

Commenting on the release, Siân Jones, senior economist at S&P Global, stated:

"Downside risks to manufacturing growth remain numerous. Key among these for panelists were the impact of inflation on customer and investor spending. Output expectations dipped, with our latest forecast expecting a 0.9% increase in industrial production in 2022.”

FocusEconomics panelists see fixed investment expanding 6.3% in 2022, which is unchanged from last month’s projection, and growing 5.2% in 2023.

Author: Massimo Bassetti, Senior Economist

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