INSTANT VIEW 1-Czech October PMI ticks down

    PRAGUE, Nov 1 (Reuters) - The Purchasing Manager's Index 
(PMI) for the Czech manufacturing sector dipped in October to 
signal the weakest overall growth of the sector since January, 
though the index remained above its historic average of 53.6. 
 
KEY POINTS: 
                                  OCT 06    SEPT 06     OCT 05 
 Purchasing Managers' Index        55.6       55.4       54.4 
 Output                            55.3       57.0       56.8 
 New orders                        56.3       57.4       57.3 
 
 (Full table of data...............................[nPRA001001]) 
 
- 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. 
- Growth in output maintained for a forty-ninth successive month 
in October. The seasonally adjusted output index decreased to 
55.3 in October from 57.0 in September, pointing to the slowest 
expansion for 15 months and a rate of increase that was weaker 
than the long-term survey average. 
- Growth of new orders eased for the second month running in 
October. Overall, new business in the sector increased at the 
weakest rate since July 2005. Nevertheless, at 56.3, the 
seasonally adjusted new orders index still pointed to strong 
growth that was in line with the survey's historic average. 
- Having eased sharply during August and September, input price 
inflation in the Czech manufacturing sector accelerated in 
October. Average input costs rose during the month at a sharper 
rate than the average for the first ten months of the year, as 
indicated by the latest seasonally adjusted index reading of 
62.1. Inputs commonly reported as being up in price since last 
month included metals, plastics and energy. 
- Manufacturing employment expanded for the sixteenth 
consecutive month in October. However, the rate of job creation 
has eased four times in five months since reaching a high in 
May. At 51.2, the seasonally adjusted employment index signalled 
only a weak rate of growth of the manufacturing sector 
workforce. 
- Data released by NTC Research and ABN Amro. 
 
COMMENTARY: 
    ZSOLT PAPP, ECONOMIST, ABN AMRO, LONDON 
    "The softer October PMI seems to be mainly driven by a 
slowdown of the domestic economy, as export orders picked up 
from a month ago. It now remains to be seen if the slowdown in 
the rate of expansion in manufacturing is only temporary. As a 
side effect, the PMI figures also signal a slowdown in output 
price inflation, which would ease CPI inflation risks going 
forward." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nL26548848] 
- Aug foreign trade figures......................[ID:nL06159828] 
- Aug industrial output...........................[ID:nL1264101] 
- Second-quarter GDP growth data.................[ID:nL08422633] 
                                                  [ID:nL0863924] 
 
LINKS: 
 
- For LIVE Czech economic data releases, click on       <ECONCZ> 
- 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                <CZKVIEW> 
- Czech money guide                                      <CZK/1> 
- Czech benchmark state bond prices                   <0#CZBMK=> 
- Czech forward money market rates                      <CZKFRA> 
 
 ((Reporting by Mirka Krufova; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
  Keywords: ECONOMY CZECH PMI