Czech Republic: Strongest improvement in operating conditions on record amid easing restrictions and soaring price pressures in June
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 62.7 in June, up from May’s 61.8 and marking a fresh all-time high thanks to a further lifting of containment measures. Therefore, the index moved further above the critical 50-threshold separating improvement from deterioration in operating conditions of the manufacturing sector.
June’s print largely reflected stronger expansions in new orders and production. Moreover, employment grew at a faster pace amid mounting pressures on capacity as supply chain disruptions intensified. Raw material shortages and record-breaking delivery delays in turn translated into a fresh record-high for input cost inflation, driving output charges up at the strongest pace on record as well. Lastly, business sentiment grew more upbeat amid hopes of an oncoming demand spree.
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“As inflationary pressures strengthen monetary policy is likely to shift accordingly. We currently forecast two interest rate hikes from the CNB in the second-half of 2021.”