Czech Republic: Manufacturing PMI slows to lowest in four months in March
April 1, 2016
In March, the manufacturing Purchasing Managers’ Index (PMI), elaborated by Markit, fell from February’s 55.5 to 54.3. The reading represents a second consecutive month of moderation. Nevertheless, the manufacturing PMI remained above the 50-long-term average that indicates expansion in the manufacturing sector, where it has been since May 2013.
Although the indicator decreased in March, there were some bright spots contained in the monthly survey, including output growth, which accelerated over the previous month, and input costs, which fell for the sixth month in a row. However, this positive development was offset by decelerations in new orders, as well as job increases, with growth in manufacturing employment fell to its slowest rate in almost two years. The indicator is above its long run average of 52.9; however, there are signals that suggest the expansion in manufacturing may be moderating because of weakening external demand.
Markit commented that, “after a strong start to 2016, the pace of Czech manufacturing growth eased further in March. That said, the PMI averaged 55.6 in the first quarter, a stronger outcome than the fourth quarter (54.6). Moreover, Czech goods producers continue to outperform their Eurozone counterparts (based on the March flash reading). As signaled by the PMI, official IP growth rebounded in January. But the outlook for Q2 looks less rosy given the renewed slowdown in new export business, which increased at one of the weakest rates in over two-and-a-half years in March.”
Author: Robert Hill, Economist