INSTANT VIEW 1-Czech Sept PMI posts steep decline

...months in the survey 
history. However, the latest figure remained above the long-run 
series average of 54.1 and pointed to robust overall growth. 
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KEY POINTS: 
                                  SEPT 07     AUG 07   SEPT 06 
 Purchasing Managers' Index        55.8       58.8      55.4 
 Output                            57.3       61.2      57.0 
 New orders                        57.6       60.3      57.4 
 
 (Full table of data...............................[nPRA001521]) 
 
- 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 output index fell sharply to 57.3 in September from 61.2 
in August, signalling a slower rate of growth of Czech 
manufacturing output at the end of the third quarter. However, 
the pace of expansion was still strong, with demand and new 
orders continuing to increase. 
- The seasonally adjusted new export orders fell to a 10-month 
low of 55.5, though this figure still pointed to a strong 
overall expansion that was greater than the long-run survey 
average. Firms noted healthy demand from new EU member states 
and Russia. 
- The input prices index decreased to 60.1 in September from 
62.4 in August, pointing to the weakest input cost inflation 
since May but a sharp rate nonetheless. Almost a quarter of 
survey respondents reported higher average input costs than in 
August, often citing rising food and energy prices. 
- Czech manufacturers raised their selling prices for the 21st 
successive month in September. The output prices index decreased 
to 53.5, from 55.6 in August, pointing to the weakest inflation 
of the year so far but a robust rate nonetheless. 
- Growth of the Czech manufacturing sector workforce was 
extended to a 27th successive month in September. At 52.0, down 
from 55.8 the previous month, the employment index signalled the 
weakest rate of job creation in the sector for almost a year. 
The latest easing in jobs growth reflected the tempering of new 
business expansion in the sector from recent highs. 
- Data released by NTC Research and ABN Amro. 
 
COMMENTARY: 
    ZSOLT PAPP, ECONOMIST, ABN AMRO, LONDON 
    "The unexpectedly sharp drop in the September PMI might 
reflect the impact of the floods, which hit parts of the Czech 
Republic in late August and early September. Against this 
background, the September figure underscores the robustness of 
the Czech manufacturing industry." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nL27772602] 
                                  [D:nPRA001517] [ID:nPRA001518] 
- July foreign trade figures.....................[ID:nL04578891] 
- July industrial output.........................[ID:nL10726236] 
- Second-quarter GDP growth data.................[ID:nL07341365] 
                                                 [ID:nL07662770] 
 
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[PRAGUE/Reuters/Finance.cz]