Czech Republic PMI December 2016

Czech Republic

Czech Republic: Manufacturing PMI rebounds and hits nine-month high in December

January 2, 2017

The Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit rose from November’s 52.2 to 53.8 in December, marking the best result since March. The indicator therefore moved further above the 50-point threshold which separates expansion from contraction in the manufacturing sector and now sits above its long-term average of 52.9.

December’s increase reflected faster growth in production, new orders and job creation. Output growth accelerated from the previous month, on the back of a stronger inflow of new orders. On the external front, new export orders also increased, albeit at a moderate rate. Employment continued to rise, as it has done consistently each month for more than three and a half years, and achieved the strongest expansion since February. Manufacturers’ purchasing activity also grew, and at a stronger pace than in November. Regarding price developments, both input and output prices grew at the fastest pace in one and a half years.

Trevor Balchin, Senior Economist at IHS Markit, commented that, “Czech manufacturers ended 2016 with a solid overall performance, rounding off the best quarter since the opening three months of the year […]. IHS Markit forecasts overall economic growth to accelerate in Q4 following the slowdown observed in Q3, and the latest PMI data support this outlook.”

FocusEconomics Consensus Forecast participants see fixed investment increasing 3.2% in 2017, which is unchanged from last month’s projection. For 2018, panelists expect fixed investment to expand 3.6%.

Author: Massimo Bassetti, Economist

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Czech Republic PMI Chart

Czech Republic PMI December 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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