Czech Republic: Manufacturing PMI ticks up in October but remains stuck in contractionary territory
November 1, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, inched up from 44.9 in September to 45.0 in October. Despite the uptick, the index remained well below the critical 50-mark separating expansion from contraction in activity in the manufacturing sector, where it has been for the past 11 months.
October’s increase was mainly driven by softer falls in both output and new orders. Notably, although the rates of decline in new orders and new export business moderated slightly compared to September, they were among the sharpest since 2009 amid subdued demand from the automotive sector. On the price front, input cost inflation ticked up, and firms lifted output charges for the first time in three months despite a weak demand environment. Lastly, manufacturers shed jobs at the fastest rate in nearly a decade, and turned pessimistic for the first time since December 2012 due to their bleak assessment over demand conditions ahead.
Author: Javier Colato, Economist