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Czech Republic PMI January 2018

Czech Republic: Manufacturing PMI remains at over six-year high level in January

The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit remained at 58.8 points in January, matching the figure seen in the previous month. As a result, the manufacturing PMI remained at the highest level since January 2011. Moreover, the indicator remained firmly above the crucial 50-point mark separating expansion from contraction in the manufacturing sector.

The figure was supported by strong growth in output, new orders and foreign demand. Subsequently, business confidence reached its highest level in two years. Output grew at the fastest clip in nearly seven years due to stronger demand at home and abroad. Because of continued strong growth in new orders, companies increased their payrolls by taking on more staff. Labor shortages remained an issue, however. Inflationary pressures on prices accelerated in January due to higher raw material prices and supply shortages. Subsequently, output prices rose markedly as well.

Sian Jones, Economist at IHS Markit, commented:

“January survey data signalled a continuation of the marked growth seen towards the end of 2017. […] Meanwhile, firms remained optimistic with regards to the year-ahead outlook. Business confidence was the strongest in two years, driven by greater client demand, expansion into new export markets and planned investment in technology.”

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