INSTANT VIEW 3-Czech April industry output hits 1-year high

...economy was sustaining a robust pace of 
expansion, data showed on Tuesday. 
 
KEY POINTS: 
(brackets denote previously reported data) 
(y/y change in pct)      April    March           April forecast 
 Industrial output       14.0     11.0 (12.7)      13.5 
 Industrial sales        14.4     11.8 (13.2)       n/a 
 Construction output     17.6     26.4              n/a 
 
 (Full table of data............................[ID:nPRA001345]) 
 
- Statistics bureau says the sector's growth holds in double 
digits for fourth consecutive month. Annual growth is fastest 
since March 2006. 
- Seasonally-adjusted output falls 0.5 percent month-on-month. 
- Adjusted for the effect of one more working day over a year 
ago, output increases 11.5 percent year-on-year. 
- Direct exports sales, accounting for slightly more than half 
of sales in the entire industrial sector, up 22.0 percent in 
real terms, quickening after a 15.5 percent rise a month ago. 
 
COMMENTARY: 
    MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE 
    "The industrial output data fit well into all the data 
showing the Czech economy is in good shape. The market could 
sense a greater chance for a further rise in interest rates. On 
the other hand, the industrial sector developments themselves 
show that fast wage growth is being offset by a rise in 
productivity." 
     
    RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT, PRAGUE 
    "Although industrial output came in a little bit stronger 
than the consensus, we do not consider it a surprise given the 
very strong export growth reported for April. 
    "Industry is benefiting from the strong economic momentum in 
the European Union but strengthening domestic demand is also 
providing a support. Nevertheless, it seems that ... the 
positive news from the economy will have only very limited -- if 
any -- impact on the crown. 
    "Combination of the weaker crown and above-average economic 
growth is supporting the case for a further increase in interest 
rates. We expect Czech central bankers to deliver the next 25 
basis point interest rate hike at their July meeting." 
 
MARKET REACTION: 
- Crown a tad firmer at 28.465 per euro  by 0720 GMT. 
Debt yields and money market rates flat to slightly higher. 
 
BACKGROUND: 
- April foreign trade figures....................[ID:nL06479683] 
- Report on last Czech c.bank rate decision      [ID:nPRA001319] 
                                 [ID:nL31276683] [ID:nL31320495] 
LINKS: 
- For further details on April 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] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
  Keywords: CZECH ECONOMY/INDUSTRY