Czech Republic: Manufacturing PMI falls to lowest result in over a year
May 2, 2016
In April, the manufacturing Purchasing Managers’ Index (PMI), elaborated by Markit, fell from March’s 54.3 to 53.6. The reading represented the third consecutive month of moderation. Nevertheless, the manufacturing PMI remained above the 50-long-term average that indicates expansion in the manufacturing sector, where it has been since May 2013.
April’s survey results showed that growth of output, new orders and stocks of purchases declined. New export orders also fell to their weakest expansion in 35 months. Despite overall growth in manufacturing slowing, the rate of job creation showed a robust increase in manufacturing employment, making three years of consecutive expansions, which is a series record. Markit also noted that the increase reflected an attempt to control backlogs, which have also been expanding in recent months. Lastly, input prices fell for the fourth consecutive month in April, which marked the longest series of reduction in six and a half years.
Markit commented that, “the first batch of PMI data for the second quarter provides further evidence that growth of the Czech manufacturing sector has moderated since the start of the year. Weak export demand, linked to a subdued German manufacturing economy, has weighed on overall new business growth. The latest rise in Czech manufacturing export orders was the weakest in the near-three year sequence of expansion. Meanwhile, downward pressure on prices was maintained for a fourth successive month. Nevertheless, the PMI was still above its long-run trend level of 52.9, jobs growth remained solid and backlogs continued to grow.”
Author: Robert Hill, Economist