INSTANT VIEW 1-Czech PMI ends 2006 on a positive note

    The Purchasing Manager's Index 
(PMI) signalled a sharp overall rate of growth of the Czech 
manufacturing sector in December and the fastest expansion for 
four months, a survey showed on Tuesday. 
 
KEY POINTS: 
                                  DEC 06     NOV 06     DEC 05 
 Purchasing Managers' Index        56.2       55.6       55.1 
 Output                            58.9       58.0       59.3 
 New orders                        57.2       56.7       56.9 
 
 (Full table of data...............................[nPRA001097]) 
 
- 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. 
- Output rose to 58.9 in December, from 58.0 in November, 
signalling a steep increase in production levels and the fastest 
expansion for four months. Having eased to its weakest level for 
over a year in October, the latest index underlined the renewed 
momentum in output growth in the Czech manufacturing sector at 
the end of 2006. 
- New orders remained strong in December and edged up slightly 
since the previous month. The survey has indicated relatively 
marked new order growth in 2006, though during the fourth 
quarter the rate of expansion has generally been in line with 
the five-and-a-half year survey average. 
- Input prices eased for the second successive month to an 
eight-month low in December. Output prices rose at a rate 
broadly in line with the average for 2006 in December. 
- Manufacturing employment increased at the strongest rate in 
the survey history in December. The seasonally adjusted index 
rose to 54.5, from 53.8 in November. 
- Data released by NTC and ABN Amro. 
 
COMMENTARY: 
    ZSOLT PAPP, ECONOMIST, ABN AMRO, LONDON 
    "The renewed up-tick in the December PMI further underpins 
our view that momentum in Czech manufacturing remains strong. In 
spite of the increase in December, output price inflation 
(charges) remained below the levels recorded earlier in the 
year, suggesting that inflation risks stay under control." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nL20551907] 
                                                 [ID:nL20599163] 
- Oct foreign trade figures......................[ID:nL06178576] 
- Oct industrial output..........................[ID:nL12357215] 
- Third-quarter GDP growth data..................[ID:nL08309748] 
 
LINKS: 
 
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[PRAGUE/Reuters/Finance.cz]