INSTANT VIEW 1-Czech July PMI reached new high in July

01.08.2007 | , Reuters
Zpravodajství ČTK


perex-img Zdroj: Finance.cz

The Czech Purchasing Manager's Index (PMI) hit a new survey high at the start of the third quarter, pointing to the strongest overall...

...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]

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