PRAGUE, June 30 (Reuters) - Czech industrial output dropped
by a worse-than-expected 21.7 percent year-on-year in May,
compared with a 22.1 percent fall in April, the Czech
Statistical Bureau (CSU) said in a flash estimate on Tuesday.
Analysts had forecast an 18.0 percent annual fall in May.
The CSU, which started providing a flash estimate on
production in April, said the data included 72 percent of
industrial output respondents representing 81 percent of the
standard survey sample in total revenues.
The statistics office will release full details on July 13.
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KEY POINTS:
(y/y change in pct) May April May forecast
Industrial output -21.7 -22.1 -18.0
- Seasonally adjusted output dropped 19.8 percent year-on-year.
- Industrial sales fell 23.2 percent annually in current prices
in May.
- The value of new orders dropped 27.6 percent year-on-year in
May, of which foreign orders fell 26.7 percent.
COMMENTARY:
PETR DUFEK, ANALYST, CSOB:
"It is a very crummy figure, which shows that there is no
stabilisation in the industry happening yet.
The steep year-on-year drop signals that also
month-on-month, industry will show a further drop.
Even the scrap subsidy in Germany, supporting the output of
the overall automotive industry, was not enough to stabilise the
industrial output in the Czech Republic.
Overall, it is another figure that indicates the second
quarter may have been even worse than the first from the
perspective of GDP.
The new forecast of the CNB (central bank), which will be
discussed by the board in August, will thus probably be even
more sceptical that the previous one... and most likely, there
will be again on the table the probability of a rate cut by 25
basis points."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"The figure is unwelcome and it looks like no improvement
has been achieved since the beginning of the year."
"There is a contradiction between figures released today and
slightly improving PMI in manufacturing."
"We also see some contradiction between the figures and
rising consumption of electricity by large corporations in May.
So I would expect the figure to be revised upward at some later
stage."
"Nevertheless, the picture in industry remains bleak...
Obviously, as Czech industry is so interconnected with the rest
of Europe, it cannot rebound without a rebound in core markets."
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"It was a further disappointment because there is still a
huge gap between sentiment indicators and real figures. It seems
optimism from PMI indices is not based on real figures."
"The poor situation in Czech industry continues."
MARKET REACTION:
The Czech crown <EURCZK=> was little changed at 25.95 after
the data, trading at stronger levels along with regional peers
on better risk appetite towards emerging Europe assets.
LINKS:
- For further information on May special preliminary releases on
industry data, Reuters 3000 Xtra users can click on the Czech
Statistical Bureau's Website:
http://www.czso.cz/eng/redakce.nsf/i/home
- 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>
(Reporting by Mirka Krufova, editing by Jan Lopatka)
