* Czech Jan PMI hits record high 60.5
* Polish PMI dips to 55.6, from 56.26
* Hungary rises 0.7 points to 54.7
By Michael Winfrey
PRAGUE, Feb 1 (Reuters) - A sustained surge in new orders
pushed Czech manufacturing activity to its highest level to date
in January but Poland's decelerated despite robust orders as
producers reported strong rises in input prices.
Riding in the rip curl of a German export boom, the European
Union's emerging east has confounded market expectations of an
early-year slowdown with promising indications that an end-2010
surge in output has a way to run.
The Czech Purchasing Managers' Index (PMI) hit a high of
60.5 last month, up from December's 58.4 and beating a previous
record of 59.5 set in July 2007 on the back of the fastest
growth in new orders since the survey began in June 2001,
according to data from Markit Economics on Tuesday.
In Poland, where 38 million consumers are the main driver of
the region's biggest economy, the PMI dipped to 55.6 from 56.3
but was still well above the 50-point level that demarcates
expansion from contraction.
The Polish PMI was driven by the second-fastest rise in new
orders since 2004, even though output prices rose and
manufacturers reported they were passing on higher prices to
customers.
Economists said the data, particularly that from the Czech
Republic, indicated gross domestic product (GDP) growth could
exceed expectations at the start of the year.
"It is another signal that industry is getting along, that
the economy is still in a period of relatively strong growth,
and that this growth is not slowing in the first quarter. We can
expect relatively strong GDP figures this year," said Vojtech
Benda, a senior analyst at ING Commercial Banking.
Hungary's PMI, compiled using different methodology, rose
0.7 points to 54.7, with an 8.5 point spike in export volume and
strong rises in imports and purchasing prices. []
The euro zone is a major customer for the newer EU member
states, and its PMI showed manufacturing was regaining momentum
across the common currency area, including its debt-ridden
periphery, with the exception of Greece. []
The Hungarian forint and Polish zloty <EURHUF=> <EURPLN=>
each rose 0.5 percent on expectations of higher interest rates,
while the Czech crown rose 0.2 percent. []
PRICES JUMP
Input prices rose in all three countries -- Hungary's by 4.1
points from December to January to 71.0, and Poland's to a
survey record high, beating a previous peak hit in 2004.
The main reason was a spike in commodity prices. Food and
metal prices have surged, while Brent crude rose above $100 on
Monday due to concerns that Egypt's political upheaval could
spread in the Middle East.
In Poland, some 53 percent of firms reported greater cost
burdens, blaming this on a combination of rising prices for raw
materials and higher VAT. Metals, chemicals, oil products and
energy were all reported as having risen in price.
Economists said higher manufacturing costs could potentially
sharpen debate on central bank boards across the region that are
trying to balance policy to tackle resurgent price pressure
without stifling fragile domestic demand.
But they added there was little sign that inflation was
filtering through into the domestic prices, even if the PMI data
showed manufacturers were passing on rising costs to consumers.
"The bulk of the pickup in inflation has still been food and
the international prices of energy," said Neil Shearing, an
economist at London-based Capital Economics.
"My sense is still that this is clearly good news for
manufacturers and good news for growth but I'm not convinced it
will prompt early rate hikes. Perhaps we will get one here or
there, but it won't lead to aggressive tightening."
(Editing by Ruth Pitchford)
