Czech Republic: Manufacturing PMI slips to near two-year low in September
October 1, 2018
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit dipped from 54.9 in August to 53.4 in September, the third consecutive monthly fall and the lowest reading since November 2016. Nonetheless, the PMI remained firmly above the critical 50-point mark separating expansion from contraction in activity in the manufacturing sector.
September’s drop largely reflected slower growth in new business orders, output and employment. New orders rose at the weakest pace in nearly two years in September; however, export orders quickened slightly. Similarly, growth in production eased to a near two-year low and job creation rose at the softest clip in over two years. On the price front, input cost inflation accelerated at the highest rate since October and was among the fastest seen over the last seven years. The pick-up in input costs reflected higher prices for energy, fuels and metals. Manufacturers passed these higher costs onto customers, with the pace of output charge inflation accelerating above the historical average. Lastly, optimism among firms weakened to its lowest in nearly two years, reflecting heightened worries over the global trade scenario and a loss of competitiveness owing to rising costs.
Czech Republic Fixed Investment Forecast
FocusEconomics Consensus Forecast participants see fixed investment increasing 6.6% in 2018, which is unchanged from last month’s projection. For 2019, panelists expect fixed investment to expand 3.9%, down 0.1 percentage points from last month’s estimate.
Author: Javier Colato, Economist