Czech Republic: Manufacturing PMI signals weaker expansion in September amid supply shortages
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) dropped to 58.0 in September from August's 61.0. As such, the index remained entrenched above the 50-threshold, signaling a continued improvement in business conditions from the previous month.
September’s reading chiefly reflected somewhat softer expansions in output and new orders compared to the previous month, due to persistent capacity and material shortages. On the price front, input cost inflation moderated somewhat but remained elevated as protracted supply-chain disruptions continued fuel prices increases, while output charges rose at an overall strong pace as firms passed on cost burdens to clients. Lastly, confidence among Czech manufacturing firms fell to the lowest level in ten months due to labor shortage concerns.
Commenting on the release, Siân Jones, senior economist at IHS Markit, stated:
“The rise in input costs remained substantial and severe by historical standards. Supplier price hikes reportedly impacted purchasing activity, as firms wait for softer increases in costs and utilised stocks of purchases to supplement production.”