PRAGUE, Oct 30 (Reuters) - Czech industrial output dropped
11.9 percent year-on-year in September, in line with
expectations, deteriorating from an 8.4 percent fall in August,
the Czech Statistics office said in a flash estimate on Friday.
Analysts said the data was in line with forecasts and showed
a gradual improvement in industry that would give support for
the central bank to keep rates on hold at a meeting on Nov. 5.
According to a Reuters poll, the market had forecast a 12.0
percent annual fall in September. If confirmed when the stats
office releases full details on Nov. 11, the drop would be the
ninth double-digit fall in twelve months of contractions.
But the data also showed that, when adjusted for the number
of working days -- September had one less than last year --
production fell by 9.8 percent, the second single-digit fall in
adjusted terms in a row.
The CSU said the data included 73 percent of industrial
output respondents, representing 81 percent of the standard
survey sample in total revenues.
Although worse than the previous month, the data follows
gradually improving sentiment data from the Czechs' main export
market, the euro zone. Policymakers have said the worst of the
crisis has passed.
The finance ministry surprised market watchers on Thursday
when it said in its regular quarterly forecast it expected the
economy to grow by 0.3 percent in 2010 as it saw a faster
improvement in external environment.
It had earlier forecast a 0.5 percent contraction.
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KEY POINTS:
(y/y change in pct) Sept Aug Sept forecast
Industrial output -11.9 -8.4 -12.0
(For table of June data click on...............[])
- Seasonally adjusted output was estimated to be down 9.8
percent year-on-year.
- Industrial sales fell 16.0 percent annually in current prices
in September.
- The value of new orders dropped 13.8 percent year-on-year in
September, of which foreign orders fell 11.6 percent.
COMMENTS:
PAVEL SOBISEK, CHIEF EECONOMIST, UNICREDIT PRAGUE
"It shows that the stabilisation in industry is continuing."
"We've gone through a second month when the figures adjusted
for working days are in single digit declines."
"For the entire third quarter, the pace of the decline
slowed compared with the second quarter by some 4 percentage
points, which means quarter-on-quarter industry has contributed
to growth in the economy."
"One factor is the influence of the number of working days.
There was one less day in September compared with the same month
last year."
The second factor is the influence of the (comparative)
base. Last year September was the last month showing a growth in
industry, while in August last year there was a drop."
JIRI SKOP, ECONOMIC AND STRATEAGY RESEARCH, KOMERCNI BANKA
"For the Czech economy, introducing the scrap subsidy abroad
was important due to the large proportion of the car industry."
"(The subsidy) has been helping our economy since February.
But its end will lower the dynamics in the fourth quarter of
2009."
"Industry is unlikely to get to growth numbers in annual
terms very quickly. It cannot be expected before the next
year... a more significant improvement cannot be expected until
there is a lasting recovery in the euro zone."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"It was just as we expected, so no surprise. The figure is
slightly worse than the previous month but that is because
variations of working days and the 2008 data base."
"The underlying trend is Czech industry is improving, and
the worst of the recession is behind us.
"Data support the view that the Czech national bank can
leave interest rates unchanged next month, because the Czech
crown has eased somewhat and economic conditions are slightly
improving. Moreover, inflation should be more or less in line
with the bank's target next year."
"So the chance for stable interest rates is increasing."
BACKGROUND:
- Market expectations before release []
LINKS:
- For further information on September 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 Jason Hovet)
