Czech Republic PMI October 2016

Czech Republic

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.”

FocusEconomics Consensus Forecast participants see fixed investment increasing 1.1% in 2016, which is down 0.9 percentage points from last month’s projection. For 2017, panelists expect fixed investment to expand 2.7%.

Author: Massimo Bassetti, Economist

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Czech Republic PMI Chart

Czech Republic PMI October 2016

Note: IHS 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: IHS Markit.

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