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PRAGUE, Feb 2 (Reuters) - Czech industry continued its steep
decline in January, data showed on Monday, with the Czech
Purchasing Managers' Index falling to 31.5 for the seventh
consecutive monthly contraction below the critical 50.0 mark.
Compared with 32.7 in December, PMI was hit by series-record
declines in new orders and employment, while deflationary
pressure was also evident as both input and output prices
continued to fall sharply, Markit Economics and ABN Amro said .
The figure for output rose for the first time since
September, to 29.5, indicating a slightly weaker rate of
contraction than in December but still the second lowest in the
survey's history.
In Poland, parallel data showed PMI there <PLPMI=ECI> rose
to 40.3 points in January from a record low of 38.3 in December.
****************************************************************
KEY POINTS:
JAN 09 DEC 08 JAN 08
Purchasing Managers' Index 31.5 32.7 56.1
Output 29.5 27.4 57.8
(For full table, double click on................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
MARTIN BLUM, EMERGING STRATEGIST, UNICREDIT, VIENNA
"The notable part is the headline figure has moved further
south, which is in contrast to what we have seen in other
countries like Poland."
"It is clear that because they are such an export-oriented
and open economy, and because this is a manufacturing focussed
indicator, that the Czechs were going to be one of the most
affected in January."
"It confirms what we already know that it is going to a weak
first quarter for the Czech economy. In terms of policy, it is
something pencilled in, and in terms of whether this is a
revelation for the market, I don't really think so."
"We are forecasting -1.2 percent (GDP) for this year."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"Today's indicator of PMI, together with a drop in
(industrial) orders plus the negative development of exports,
all point in the same direction: industry will likely start this
year with a steep fall, and that will be the main negative
factor for GDP."
LARS CHRISTENSEN, SENIOR ANALYST, DANSKE BANK
"(That the number fell further) is, I think, quite
surprising."
"Of course, it's no surprise that Czech industry is
suffering a lot, but it is surprising in our view that it is
falling even further from these low levels."
"If you compare the PMI in the Czech Republic and Poland,
where we have seen a rebound in the PMI data, I think it's
somewhat surprising, but it further underlines that Czech
industry, especially the car industry, is suffering a great deal
from the global industrial drop."
"No doubt GDP growth is going to be negative this year."
TREVOR BALCHIN, ECONOMIST, MARKIT ECONOMICS, LONDON
"PMI data sank lower at the start of 2009, indicative of
depressed demand conditions in the manufacturing sector and
signalling a stall in wider economic growth. The latest findings
lend support to calls for further aggressive cuts in interest
rates, which are expected to fall in the February meeting by
another 50 basis points to equal the historic low of 1.75
percent. Although the crown has weakened, the PMI prices data
suggest inflationary pressures are fading."
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] [] []
- November foreign trade figures..................[]
- November industrial output......................[]
[] []
- Third-quarter GDP growth 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>
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(Reporting by Mirka Krufova)
