INSTANT VIEW 1-Czech April PMI continues strong pace

...sector, although the 
rate of improvement in business conditions weakened in April to 
56.1 from March's  57.0. 
 
KEY POINTS: 
                                 APRIL 07  MARCH 07   APRIL 06 
 Purchasing Managers' Index        56.1       57.0       55.0 
 Output                            56.6       57.3       58.3 
 New orders                        56.5       57.9       57.2 
 
 (Full table of data...............................[nPRA001277]) 
 
- A figure above 50 indicates expansion on the previous month 
while a number below 50 signals contraction. 
- The headline index has held above the neutral mark of 50.0 
since March 2003. 
- The headline figure from the survey designed to provide a 
single-figure snap-shot of the health of the manufacturing 
economy. The PMI moved lower in April, to 56.1 from 57.0 in 
March. Though this was the lowest reading for five months, it 
still pointed to a sharp rate of improvement in business 
conditions, and the headline index was comfortably above its 
long-term average of 53.9. 
- Growth of output was maintained in April, despite easing 
slightly since March. The output index decreased to 56.6 from 
57.3 the previous month, indicating the weakest rate of growth 
in production since last October, but a sharp expansion 
nonetheless. 
- New orders index signals a further sharp increase in new 
orders to Czech manufacturers at the start of the second 
quarter. However, the index eased further from February's 
six-month peak of 59.2, and the latest reading indicated the 
slowest overall expansion of new work since October 2006.  
- New export orders continued to increase at a marked rate in 
April. The new export orders index fell to a four-month low of 
57.4, from 59.0 in March, but still pointed to healthy business 
from customers in export markets. 
- Input prices paid by Czech manufacturers increased for the 
21st month running in April. Although, at 58.0, the input prices 
index signalled a sharp rate of inflation, it has moved lower 
for the past three months, indicating a weakening of cost 
inflationary pressures in the sector.. 
- Strong employment growth in the Czech manufacturing sector was 
maintained in April. In the first four months of 2007, the rate 
of jobs growth indicated by the survey has been stronger than at 
any other time in its near six-year history. 
- Data released by NTC Research and ABN Amro. 
 
COMMENTARY: 
    ZSOLT PAPP, ECONOMIST, ABN AMRO, LONDON 
    "April PMI figures underscore the robust momentum in the 
manufacturing industry, which in our view bodes well for overall 
growth prospects in the rest of this year. On the other hand, 
data also highlight continued inflation pressures. So far, the 
central bank has not yet adjusted its monetary policy, but 
further increases in inflation could likely prompt a rate hike 
later in the year." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nPRG000331] 
                                                 [ID:nL26624395] 
- Feb foreign trade figures.......................[ID:nL0424065] 
- Feb industrial output..........................[ID:nL11620237] 
- Fourth-quarter GDP growth data.................[ID:nL09207856] 
 
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[PRAGUE/Reuters/Finance.cz]