Czech industrial workers seek pay hike over 10 pct

... productivity, an OS KOVO union official said on Thursday.

OS KOVO is the country's biggest trade union group, representing about 170,000 workers in some 1,100 industrial companies including Volkswagen unit Skoda Auto, the largest Czech company in terms of both revenue and exports.

"Labour productivity as well as profits at companies are rising, so in collective bargaining we will demand a pay rise of about 10 percent and more, depending on labour productivity levels," OS KOVO Chairman Josef Stredula told Reuters.

He said economists at the umbrella trade union organisation CMKOS, grouping together OS KOVO and other unions, were forecasting inflation of between 4.8 and 5.3 percent in 2008, compared with September's 2.8 percent.

This year's steady fall in unemployment, to a decade low of 6.2 percent in September, and growing evidence of workforce shortages in the booming manufacturing and construction sectors have fuelled concerns about wage contagion at the central bank.

Central bank (CNB) policymaker Vladimir Tomsik warned on Thursday inflation pressures in the booming central European economy would build if overall wage growth exceeded 8 percent next year [ID:nL10373969].

The CNB forecast 3.5-4.9 percent inflation at end-2008.

In the first half of this year, the average nominal monthly wage across the economy grew 7.6 percent over a year ago, giving a real pay rise of 5.5 percent thanks to low inflation. In 2006, wages grew 6.4 percent in nominal and 3.8 percent in real terms.

[PRAGUE/Reuters/Finance.cz]