Czech Republic: Manufacturing PMI moves further into expansionary territory in October
November 2, 2016
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit rose from September’s 52.0 to a five-month high of 53.3 in October. This brings the indicator further above the 50-point threshold which separates expansion from contraction in the manufacturing sector, and also slightly above its long-run average.
October’s increase mainly reflected a broad-based improvement. New orders expanded for the second consecutive month, at the fastest pace since March. Output rose for the third month running, also at the fastest rate since March. On the external front, new export orders increased for the first time in four months. Moreover, employment continued to rise, marking three and a half years of job creation. Manufacturers’ purchasing of inputs also grew, and at the fastest pace since May. Regarding price developments, input prices increased for the sixth consecutive month, while output charges declined, likely reducing firm margins.
Trevor Balchin, Senior Economist at IHS Markit, commented that, “the Czech PMI recovered further ground in October following a weak summer period, and was slightly above its trend level for 2016 so far.”