Czech Republic: Manufacturing PMI signals strongest improvement in operating conditions in over three years in April
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 58.9 in April, up from March’s 58.0 and marking the highest reading since January 2018. Therefore, the index moved further above the critical 50-threshold separating improvement from deterioration in operating of the manufacturing sector.
April’s print largely reflected solid expansions in new orders and production. Moreover, employment grew at the fastest pace in over three years due to mounting pressures on capacity as supply chain disruptions intensified. Raw material shortages and longer delivery times in turn led to the quickest input cost inflation on record, driving output charges up at the strongest pace on record as well. Lastly, business sentiment grew more upbeat amid hopes of an end to the pandemic and rising client demand.
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The headline figure was partially boosted by an unprecedented deterioration in vendor performance which would ordinarily be a sign of improving operating conditions. […] A further implication of supply-chain disruptions was greater efforts to rebuild safety stocks among manufacturers, with purchasing activity and pre-production inventories rising.”
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The headline figure was partially boosted by an unprecedented deterioration in vendor performance which would ordinarily be a sign of improving operating conditions. […] A further implication of supply-chain disruptions was greater efforts to rebuild safety stocks among manufacturers, with purchasing activity and pre-production inventories rising.”