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PRAGUE, June 1 (Reuters) - The Purchasing Managers' Index
(PMI) for Czech manufacturing inched up to a seven-month high in
May but remained below the critical 50 mark, indicating an 11th
straight month of decline, data showed on Monday.
PMI inched up to 40.5, from 38.6 in April and a record low
in January. It was the fourth rise in the last year and near
levels recorded prior to the near-collapse of global financial
markets in the final quarter of 2008, Markit Economics said.
Output also ticked up to 41.9, from 39.0 the previous month.
Markit said seasonally adjusted new orders remained below
the no-change mark of 50.0 in May, signalling a further decline
in incoming new work in the manufacturing sector.
However, the overall rate of decline eased for the fourth
month running from January lows.
Labour market conditions in manufacturing remained very weak
in May. The employment index signalled a rapid rate of job
shedding as firms adjusted capacity lower and cut costs. But the
index was at its highest level in 2009, indicating a slightly
slower pace of workforce contraction, Markit said.
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KEY POINTS:
05/09 04/09 05/08
Purchasing Managers' Index 40.5 38.6 51.8
Output 41.9 39.0 52.6
(For table, double click on......................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
LARS CHRISTENSEN, EMEA ANALYST, DANSKE BANK
"It's still too early to talk about recovery... It is still
a very low level. The moderate improvement is more or less as
expected and is basically a European, global trend."
"The downturn is beginning to see a bottom... but the levels
on Czech PMI are still very, very low (compared to) other places
in Europe."
"We'll continue to see an improvement for the rest of the
year but it'll probably be a moderate improvement."
"I think we need to go to 2010 (to reach the 50 point
level)."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT PRAGUE
"It confirms the worst is over for Czech manufacturing. That
said, the increment rise in May was less than two points, so
smaller than in previous months."
"It means the recession in manufacturing has been slowing
but not receding."
TREVOR BALCHIN, ECONOMIST AT MARKIT
"The latest batch of PMI data provide encouraging news
following the worse-than-expected Q1 GDP figures. The signs are
that industry has turned a corner and we will see a softer fall
in output in Q2, a view underlined by the new orders, backlogs
and finished goods stocks variables."
"Further rate cuts were mooted following the GDP data, but
this release raises the likelihood that the current level of 1.5
percent represents the bottom of the cycle."
BACKGROUND:
- Report on last Czech c.bank rate decision.......[]
[] [] [] []
- March foreign trade figures.....................[]
- April industrial output.........................[]
[]
- First-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>
** Index copyright and database rights owned by Markit:
unlicensed copying strictly prohibited **
With immediate effect 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 ++
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(Reporting by Mirka Krufova; Editing by Michael Winfrey)
