Industrial production in the Czech Republic fell by 2.1% year-on-year and 0.7% month-on-month in October, disappointing market expectations.
The industry returned to the slump it had been in for most of the spring and early summer, after managing to maintain moderate growth in August-September.
“The October result of the industry was partially influenced by a high comparison basis in some important economic activities of manufacturing, especially in the manufacture of other transport equipment and in the manufacture of motor vehicles, trailers and semi-trailers,” Radek Matějka of the Czech Statistical Office (CZSO) commented.
The value of new orders in current prices rose by 2% y/y and 0.5% m/m, with new orders in non-manufacturing increasing by 3.1% y/y and in manufacturing by 0.2% y/y.
“An increase in the value of new industrial orders was the most contributed to by manufacture of computer, electronic and optical products. The number of new long-term orders also increased in enterprises in the manufacture of other transport equipment,” CZSO’s Veronika Doležalová said.
October’s industrial development was also negatively influenced by the continued decline in the production of machinery and equipment and the production of basic metals, while the production of metal products, foodstuffs, and mining and quarrying had a positive impact.
Local market analysts, when asked about future forecasts, pointed to developments in key export markets such as Germany.
“The year 2024 did not fulfil last year’s hopes of a revival,” Bohuslav Čížek, head of the economic policies at the Czech Union of Industry and Transportation, was quoted as saying by the Czech Press Agency (ČTK).
The CZSO also reported on Czech construction output, which fell 3.6% y/y and rose 3.8 m/m. February and July were the only two months this year when construction output rose year-on-year.
In the Czech Republic, “property is getting more expensive, but construction activity is falling. It is obvious that the market is not working properly,” Štěpán Křeček, an economic adviser to Prime Minister Petr Fiala, told ČTK, blaming the situation on “excessive regulation, lengthy permit processes and failed digitalisation.”
The year-on-year decline “was due to both civil engineering and building construction,” commented Radek Matějka of the CZSO. Building construction fell by 3.1 per cent year-on-year, while civil construction fell by 4.3 per cent.
Matějka’s colleague Petra Čuřínová added that the approximate value of building permits totalled CZK 43.5bn (€1.7bn), down 17.6% year-on-year, and that “the decline is rather explained by the high comparison base from October 2023, when eight large construction projects with budgets of more than CZK 1bn were authorised.”
“After their deduction, the approximate value would increase by 12%,” Čuřínová concluded.
In October, 2,571 dwellings were started, 14.6 per cent less than last year, while 1,846 were completed, or 48.4 per cent.
