Czech Republic PMI

Czech Republic

Czech Republic: Manufacturing PMI jumps to over-four-year high in July

August 3, 2015

In July, the manufacturing Purchasing Managers’ Index (PMI), elaborated by Markit, climbed from June’s 56.9 to 57.5, the highest reading since April 2011. As a result, the manufacturing PMI moved further above the 50-threshold that indicates expansion, where it has been since May 2013.

July’s improvement reflects that output and new orders expanded at faster rates than in the previous month, driven by both strengthening domestic and export demand. In addition, job creation, purchasing activity and backlogs of work rose again. Input prices continued to increase, but at a slower price than in the previous month, when they rose at the fastest pace in 16 months. Output prices also increased, albeit only marginally.

Markit commented that, “the Czech manufacturing sector started the second half of the year in a strong position, with new order growth accelerating further to the fastest since May 2014. As a result, output growth hit the highest in a year and job creation remained close to survey-record levels. Firms also benefitted from a slower rise in input prices during the month, although their own pricing power remained limited.”

FocusEconomics Consensus Forecast participants see fixed investment increasing 4.2% in 2015, which is down 0.6 percentage points from last month’s projection. For 2016, panelists expect fixed investment to expand 3.9%.

Author: Teresa Kersting, Economist

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Czech Republic PMI Chart

Czech Republic PMI July 2015 1

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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