Czech Republic PMI

Czech Republic

Czech Republic: Manufacturing PMI improves in December

January 4, 2016

In December of last year, the manufacturing Purchasing Managers’ Index (PMI), elaborated by Markit, rose from November’s 54.2 to 55.6. The reading represents a second increase following three consecutive moderations. As a result, the manufacturing PMI remained above the 50-long-term average that indicates expansion in the manufacturing sector, where it has been since May 2013.

December’s improvement mainly reflects that new orders recovered and grew at a faster pace following the decelerations observed in the previous four months. Moreover, output, employment, backlogs of work and purchasing activity also recorded solid gains. Regarding price pressures, input prices remained broadly stable compared to November while output charges recorded the largest increase since June.

Markit commented that, “Czech manufacturing output growth continued to regain momentum as 2015 drew to a close. Moreover, expansion of new business also accelerated during December and backlogs increased at the strongest rate in nearly a year. The PMI averaged 54.6 over the fourth quarter, the weakest quarterly trend for a year but still comfortably above its long-run average of 52.9. Input prices were broadly flat in December but charges rose at the strongest rate in six months, suggesting inflation may soon pick up from the 0.1% pace seen in November.”

FocusEconomics Consensus Forecast participants see fixed investment increasing 3.4% in 2016, which is unchanged from last month’s projection. For 2017, panelists expect fixed investment to expand 3.7%.

Author: Teresa Kersting, Economist

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Czech Republic PMI Chart

Czech Republic PMI December 2015

Note: Markit Manufacturing Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit.

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