INSTANT VIEW 4-Czech industry output recovers in October

...month's 
slowdown. 
**************************************************************** 
KEY POINTS: 
 
 (y/y change in pct)      Oct      Sept     Oct forecast 
 Industrial output        8.4    1.3 (1.2)   6.0 
 Industrial sales         9.3    3.3 (3.3)   n/a 
 Construction output      3.5   -1.9(-1.8)   n/a 
 
 (Full table of data............................[ID:nPRA001660]) 
 
- Seasonally-adjusted output rises 2.0 percent month-on-month. 
 
 
COMMENTARY: 
    DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE, PRAGUE 
    "The driving engine of the Czech industrial sector remains 
the automotive industry and production of electrical equipment. 
    "The fact that wages are rising faster than productivity is 
casting a shadow upon the data. Growing unit wage costs are 
highlighting labour market pressures after a sharp drop in 
unemployment, and are confirming the need for tightening of 
monetary policy to cool the overheating economy and (contain) 
the risk of a wage-inflation spiral and a rise in inflation 
expectations. However, the obstacle (to a rate rise) remains the 
crown exchange rate." 
     
    ECONOMIC RESEARCH, RAIFFEISENBANK, PRAGUE 
    "Industrial output regained pace thanks to export 
industries. Orders posted a sharp rise. Companies are doing all 
they can to fulfil them. Output growth is hitting the capacity 
barrier, and its rate is slowing. We expect this year's 
industrial output growth to be 9 percent, and 7 percent next 
year." 
     
    PETR DUFEK, ANALYST, CSOB BANK, PRAGUE 
    "Output growth was very strong ... mainly thanks to the 
automobile and electronics industry. The favourable numbers show 
that companies are still doing very well in taking advantage of 
opportunities on foreign markets. However, what will be more 
exciting will be results for November, when the crown firmed 
sharply." 
 
MARKET REACTION: 
- Crown barely reacts, trading slightly weaker on the day at 
26.055 per euro  by 0828 GMT, not far off Monday's 
lifetime high of 25.933. 
 
    BACKGROUND: 
- October foreign trade figures...................[ID:nL0594409] 
- Report on last Czech c.bank rate decision      [ID:nL29206268] 
                                  [ID:nPRA001631] [ID:n29679528] 
 
LINKS: 
- For further details on October output and sales numbers and 
past data, Reuters 3000 Xtra users can click on the Czech 
Statistical Bureau's Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-pru 
 
- 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                       
 
 (Reporting by Marek Petrus; Editing by Ruth Pitchford) 
  
  Keywords: CZECH ECONOMY/INDUSTRY  
    

[PRAGUE/Reuters/Finance.cz]