Czech Republic: Manufacturing PMI falls to over six-year low in February
March 1, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit edged down from 49.0 in January to 48.6 in February, marking the third consecutive monthly contraction of the all-important sector and an over six-year low. Consequently, the index moved further below the critical 50-point mark separating expansion from contraction in activity in the manufacturing sector.
February’s downturn reflected sharper declines in output and new orders compared to January. Production fell at one of the fastest rates in over five years due to weaker customer demand, while new business dipped for the fourth successive month amid challenging global trade conditions. That said, manufacturers raised their staff levels in February, contrasting the decline in employment in the previous month. On the price front, input costs continued to rise markedly amid higher raw material costs, which firms passed onto customers by raising output charges. Lastly, optimism among goods-producers strengthened in February, albeit only marginally and remained weak overall due to concerns over demand conditions ahead.
Author: Javier Colato, Economist