...improvement in business conditions in just over six years of data collection. KEY POINTS: JULY 07 JUNE 07 JULY 06 Purchasing Managers' Index 59.5 57.7 56.0 Output 61.8 60.2 57.9 New orders 60.8 59.0 58.3 (Full table of data...............................[nPRA001415]) - 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 index moved up for the second month running in July to 59.5, its highest level since data were first collected in July 2001. - The rate of growth of manufacturing output accelerated for the third successive month in July to the second-highest indicated by the survey to date. The seasonally adjusted index was at its highest level for almost three years, at 61.8, just short of the peak of 62.0 set in August 2004. - Firms reported that strong demand had led to large orders being placed by customers during the month. - New export orders increased at the strongest rate for four months in July. The seasonally adjusted index rose to 58.1, from 56.7 in June, indicating a steep rate of growth. - Export growth has strengthened for two successive months following three months of weakening expansion, and the latest anecdotal evidence underlined the resurgence of demand from international markets. - Input prices rose slightly in July to 62.1, from 61.6 in June, signalling the sharpest increase in average input prices in the Czech manufacturing sector for six months. - Input price inflation has now been registered for 24 successive months. Metals were often reported as being up in price since the previous month, while high oil prices were also mentioned as a source of inflationary pressure. - The rate of growth of output accelerated for the third successive month in July to the second-highest indicated by the survey to date. The seasonally adjusted index was at its highest level for almost three years, at 61.8, just short of the peak of 62.0 set in August 2004. - Employment index rose to 56.3 from 54.3 in June, recording a strong increase in staffing levels. Firms raised recruitment to support sharply rising output requirements. - Data released by NTC Research and ABN Amro. COMMENTARY: ZSOLT PAPP, ECONOMIST, ABN AMRO, LONDON "Record high PMI figures in July are evidence to the underlying strength of the Czech manufacturing and export industry. However, this is visibly fuelling inflation, which prompted the Czech National Bank (CNB) to increase its key interest rates by 25bp in late July. If this pace of expansions continues, it might provide the basis for further rate hikes by the CNB later in this year." BACKGROUND: - Report on most recent interest rate decision...[ID:nL26800751] [ID:nPRA001407] - May foreign trade figures......................[ID:nL09337680] - May industrial output..........................[ID:nL13592187] - First-quarter GDP growth data..................[ID:nL08200685] [ID:nL08216043] LINKS: - 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
[PRAGUE/Reuters/Finance.cz]