INSTANT VIEW 3-Czech March industry output surges,beats fcast

...sustaining its robust pace 
of expansion this year, data showed on Tuesday. 
 
KEY POINTS: 
(brackets denote previously reported data) 
(y/y change in pct)      March    Feb             March forecast 
 Industrial output       12.7     13.6 (15.4)       9.1 
 Industrial sales        13.2     15.1 (16.8)       n/a 
 Construction output     26.4     32.5              n/a 
 
 (Full table of data............................[ID:nPRA001299]) 
 
- Statistics bureau says the sector's growth holds in double 
digits for third consecutive month. 
- Seasonally-adjusted output rises 2.3 percent month-on-month. 
- Adjusted for seasonal factors, output increases 13.5 percent 
year-on-year. 
- Direct exports sales, accounting for slightly more than half 
of sales in the entire industrial sector, up 17.0 percent in 
real terms, slowing after a 22.7 percent rise a month ago. 
 
COMMENTARY: 
    RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT, PRAGUE 
    "Both industrial output and sales came in well above 
expectation and support a picture of the Czech economy growing 
above its potential in the first quarter of 2007. The only 
possible cloud in March statistics is the relatively weak growth 
of new orders but orders are rather volatile. 
    "The data from industry keeps repeating the same 
information: a very strong activity, accompanied with growing 
employment and accelerating wage growth. Something what should 
not pass unnoticed by the central bank. One should add that the 
data is theoretically positive news for the crown but there is 
(again) hardly any reaction in the market: the crown remains 
relatively weak, definitely weaker than what the central bank 
assumes in its latest inflation forecast." 
     
    ALES MICHL, ANALYST, RAIFFEISENBANK PRAGUE 
    "The effects of the unusually warm winter again had a 
favourable impact on the figures. 
    "The relatively high wage growth in the industrial sector 
and falling unemployment shows increasingly tighter conditions 
on the labour market. We see early signs of slight wage 
inflation which does not necessitate an immediate central bank 
response, but it does justify vigilance on its part." 
 
MARKET REACTION: 
- Crown steady at 28.300 per euro  after data. Debt 
yields flat or little changed. 
 
BACKGROUND: 
- March foreign trade figures....................[ID:nL09284340] 
                                                 [ID:nL09606545] 
- Report on last Czech c.bank rate decision      [ID:nPRA001284] 
                                 [ID:nPRG000331] [ID:nL26624395] 
LINKS: 
- For further details on March output and sales numbers and past 
data, Reuters 3000 Xtra users can click on the Czech Statistical 
Bureau's Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-pru 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [CZ/INSTANT] 
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- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
  Keywords: CZECH ECONOMY/INDUSTRY  
    

[PRAGUE/Reuters/Finance.cz]