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PRAGUE, May 3 (Reuters) - The Czech Purchasing Managers'
Index (PMI) climbed to its highest since March 2008, suggesting
solid manufacturing sector recovery backed up by new orders,
especially from abroad.
PMI rose to 57.3 from 56.8 in March, the ninth-highest in
the survey history, Markit Economics data showed on Monday.
The upward movement reflected three component indices - new
orders, output and suppliers' delivery times. Of the two
remaining contributing indices, employment was broadly stable
while stocks of purchases declined modestly.
The rate of growth in total new orders received by Czech
manufacturers accelerated to the fastest since the survey began
in July 2001. This was accompanied by a record increase in new
export business.
The survey data also signalled a further rise in
manufacturing employment, and a wide gap between the dynamics of
input prices driven up by commodity price rise and output prices
depressed by competition.
New orders received by Czech manufacturers accelerated for
the fourth month in a row to its fastest since the survey began
in July 2001. The anecdotal evidence from survey respondents
suggested a strong link between new order growth and improving
demand both in domestic and export markets.
****************************************************************
KEY POINTS: 04/10 03/10 04/09
Purchasing Managers' Index 57.3 56.8 38.6
Output 60.5 60.2 39.0
(For table, double click on......................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
KUBILAY OZTURK, ECONOMIST FOR EMERGING EUROPE AT HSBC
"Recovery in the Czech manufacturing sector continued at
full speed in April - output, new and export orders advanced
noticeably on the back of further improvement in domestic and
external markets. However, the fading impact of severe winter
conditions too may probably have played a role."
"Nearly all sub-indices confirm that a wide scale recovery
is already underway, and the undisrupted improvement in
employment is particularly encouraging. Output prices retreated
again, but the surge in input costs was unexpectedly much
steeper, pointing to possible supply-side inflationary pressures
before long and, hence, the lack of need to lower rates
further".
"Meanwhile, new export orders, which grew at a record pace,
suggest concerns about a strong CZK are a bit overdone, while
upbeat April EMU PMIs, along with the recent sharp improvement
seen in German business expectations, underline that the ongoing
upward momentum will likely remain intact in the coming months".
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"A moderate growth precisely corresponds to the development
in leading indicators of the euro zone... it shows that the
Czech industry remains on a path toward the peak, rather than
from it. The development in Czech industry precisely copies the
development in other countries of the European Union."
"The PMI number today indicates that the GDP for the second
quarter should show a solid growth. Our forecast sees a
quarterly growth of 0.6 percent in the second quarter, and this
new (PMI) number does not contradict that in any significantly
way."
VOJTECH BENDA, SENIOR ECONOMIST, ING, PRAGUE
"The data confirms the favourable trend in the development
of business sentiment that we already saw in the confidence
index released by the Czech Statistics Office."
"It signals that industrial production in the Czech Republic
should stay at a relatively high level in the nearest months. We
expect an acceleration to 10 percent in March."
MARKET REACTION: The crown <EURCZK=> edged down to 25.535 to
the euro after the data release from 25.53 earlier.
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] [] []
- February foreign trade figures.................[]
- February industrial output.....................[]
- Fourth-quarter GDP data........................[]
LINKS:
- For LIVE Czech economic data releases, click on <ECONCZ>
- Instant Views on other Czech data []
- Overview of Czech macroeconomic indicators []
- Key data releases in central Europe []
- 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>
** Index copyright and database rights owned by Markit:
unlicensed copying strictly prohibited **
Detailed PMI data are only available under licence from
Markit and customers need to apply to Markit for a licence. For
further information please phone Markit on ++ 44 20 7260 2454.
(Reporting by Mirka Krufova)
