INSTANT VIEW 1-Czech Oct PMI slides to 12-month low

...expansion of the Czech 
manufacturing economy in 12 months. 
**************************************************************** 
KEY POINTS: 
                                   OCT 07    SEPT 07    OCT 06 
 Purchasing Managers' Index        54.6       55.8      54.6 
 Output                            57.2       57.3      55.3 
 New orders                        54.2       57.6      56.3 
 
 (Full table of data...............................[nPRA001580]) 
 
- 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 PMI fell for the third successive month from July's peak 
of 59.5 in October, registering 54.6. That signalled the weakest 
improvement in business conditions since October 2006, although 
the latest reading remained above the long-run survey average of 
54.1. 
- Production growth was maintained at a sharp rate in October, 
albeit below the average for 2007 so far. The output was broadly 
unchanged at 57.2, from 57.3 in September. 
- The new orders posted 54.2 in October. Although the latest 
reading indicated a solid overall rate of growth, it was below 
the long-run average of 56.5. Moreover, the index fell sharply 
from 57.6 the previous month -- the second-steepest decline in 
the survey history -- indicating a marked easing in the rate of 
expansion to a twenty-nine month low. 
- Input price inflation sharpened from September's four-month 
low in the latest survey period. In response, firms raised their 
output charges at a stronger rate than in September. 
- Czech manufacturers continued to post strong gains in output 
in October, albeit at a notably weaker rate than in the summer 
months. However, with new order growth slowing to a twenty-nine 
month low, the volume of outstanding work in the sector 
increased at only a weak pace during the month. 
- Job creation in the Czech manufacturing economy was maintained 
for a twenty-eighth consecutive month in October as firms' 
production requirements rose. However, the rate of growth in 
average workforces was the weakest for twelve months. 
- Data released by NTC Research and ABN Amro. 
 
COMMENTARY: 
    DEBBIE ORGILL, SENIOR ECONOMIST, ABN AMRO, LONDON 
    "On the regional comparison Czech manufacturing industry 
appears to be fairly relatively well, although the survey points 
to a further slowdown in activity levels at the start of the 
fourth quarter. Export orders look to be holding up well despite 
a firmer exchange rate. However, inflation pressures are turning 
higher largely down to higher oil and food prices." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nL25710600] 
                                  [D:nPRA001568] [ID:nL25439215] 
- August foreign trade figures...................[ID:nL08740676] 
- August industrial output.......................[ID:nL12144400] 
- Second-quarter GDP growth data.................[ID:nL07341365] 
                                                 [ID:nL07662770] 
 
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[PRAGUE/Reuters/Finance.cz]