Czech Republic: Manufacturing PMI signals strong albeit easing operating conditions in February
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 56.5 in February, down from January’s 57.0—which had marked the joint-highest reading since April 2018. Therefore, the index remained comfortably above the critical 50-threshold separating deterioration from improvement in the health of the manufacturing sector.
February’s print largely reflected strong albeit somewhat softer expansions in new orders and production as client demand remained robust despite protracted Covid-19 associated restrictions. Moreover, employment grew at the fastest pace since March 2018 due to mounting pressures on capacity as supply chain disruptions intensified. Supply shortages and higher transportation costs in turn led to the quickest input cost inflation in almost one decade, driving output charges up for the third consecutive month, albeit at a much softer pace. Lastly, business sentiment remained upbeat amid hopes of a successful vaccine roll-out and an end to containment measures.
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The headline index was buoyed by significant and unprecedented supply-chain disruptions. Ordinarily a signal of improving operating conditions, supplier shortages and transportation delays following greater global demand for inputs and ongoing COVID-19 restrictions substantially lengthened delivery times.”
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The headline index was buoyed by significant and unprecedented supply-chain disruptions. Ordinarily a signal of improving operating conditions, supplier shortages and transportation delays following greater global demand for inputs and ongoing COVID-19 restrictions substantially lengthened delivery times.”