Czech Republic: Manufacturing PMI hits near two-year high in August
September 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, increased from 47.0 in July to 49.1 in August, marking the best reading since December 2018. Despite the uptick, however, the index remained below the critical 50-threshold separating deterioration from improvement in the health of the manufacturing sector, where it has been for over a year.
August’s print largely reflected a stronger expansion in output, which rose at the fastest clip since October 2018 amid the reopening of business and resumption of client operations. Moreover, new orders declined at a slower rate. Firms also continued to lower staff levels, although the pace of job shedding was the weakest since October 2019. On the price front, input costs rose in August due to higher raw material prices and transportations costs, while output charges fell amid stronger competitive pressures. Lastly, business sentiment remained muted as coronavirus concerns weighed on expectations.
Author: Hanna Andersson, Economist