Prague – Industrial production in the Czech Republic fell year-on-year in January for the first time since last April, by 1.4 percent. Construction production in the Czech Republic returned to growth in January, rising by 5.4 percent year-on-year. This follows from data published today by the Czech Statistical Office (ČSÚ).
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Industrial production fell slightly in January, for the first time since last spring
Industrial production in the Czech Republic fell year-on-year in January for the first time since last April, by 1.4 percent. At the same time, according to revised data, it increased by five percent in December. The decline affected most sectors at the beginning of the year. But car production was successful. This follows from the data published today by the Czech Statistical Office (ČSÚ). According to statistics, industrial production was down 2.7 percent month-on-month in January.
The production of motor vehicles, trailers and semi-trailers in January increased by 12.7 percent year-on-year. “Even double-digit growth in the production of motor vehicles could not outweigh the decline in most other industries,” said Radek Matějka, director of the Department of Agriculture and Forestry, Industry, Construction and Energy Statistics of the CZSO. The production of electricity, gas, heat and air conditioning also contributed significantly to the decline, where, according to statistics, the above-average January temperatures showed themselves. , where the cooling of production has been noticeable for a long time. This trend was also confirmed by the decrease in the value of new orders,” noted Veronika Doležalová, head of the industry statistics department of the CZSO.
The value of new orders for Czech industry increased by 1.6 percent year-on-year in January. Orders from abroad fell by 3.5 percent year-on-year. On the contrary, the value of domestic orders rose by 13.6 percent.
The production of machinery and equipment, the production of electrical equipment and the production of other means of transport and equipment contributed the most to the slight growth of new orders. In the production of motor vehicles, the value of new orders was comparable year-on-year.
The average number of employees in industry fell by 0.8 percent year-on-year in January. Their average gross wages rose by almost 12 percent.
January industrial production ended below analysts' expectations
January industrial production ended below analysts' expectations. On average, they expected it to grow by two percent, but according to data published today by the Czech Statistical Office (ČSÚ), the industry fell by 1.4 percent year-on-year. Even in the coming months, analysts do not expect the conditions in the industry to improve, as it will struggle with weak demand. They expect stagnation or a decline in industrial production for the whole year.
“Industrial data from January show a drop in production that has been going on for several months in most sectors. This drop was partly hampered by developments in the automotive sector, but declining domestic and foreign demand means that a dramatic improvement in the coming months cannot be expected,” said Deloitte economist Filip Pastucha.
“The automotive industry managed to maintain a double-digit increase in production year-on-year, but this is a noticeable slowdown compared to previous months due to the fading effect of the low comparative base last year,” pointed out UniCredit Bank economist Jiří Pour.
“New orders do not sound positive either, although they are growing slightly, but given that they are calculated in current prices, we can actually talk about a decline,” said Petr Dufek, Chief Economist of Banka Creditas. “Industry is experiencing a weaker period caused by a slowdown in domestic and foreign demand. In addition, it partly has to deal with outages in supply chains. It is therefore likely that this time it will drag the economy into the red, and not hold it back in its decline as at the end of the year. ” he added.
Even Pastucha does not expect a change in development in the coming months. “Companies do note a slowdown in the growth of input prices, mainly due to the drop in energy prices, but on the other hand, weak household demand affects production in all sectors. As this trend will probably continue throughout this year, no significant recovery can be expected at least in the first half of the year.” stated.
Pour predicts that industrial production could decrease by two percent for the whole year. “The first half of the year will be especially challenging, when the weakened household demand due to the drop in real wages will show. Companies will also continue to face strong cost pressures,” he pointed out.
Raiffeisenbank analyst Vratislav Zámiš expects industrial production to stagnate for the whole year. “The decisive factor will be the revival of demand, when foreign demand has weakened in recent months, and this year's revival in the eurozone is a fundamental condition for Czech industrial production not to decline in 2023,” he said.
Construction production rose year-on-year and month-on-month in January, driven by building construction
Construction production in the Czech Republic returned to growth in January, rising by 5.4 percent year-on-year. The Czech Statistical Office (ČSÚ) informed about this today. Statisticians have revised the data for December, the year-on-year decrease was 2.6 percent. In January, building construction, which is the construction of residential and non-residential buildings, did well, on the other hand, the production of engineering construction, i.e. the construction of roads or telecommunications and energy networks, fell year-on-year. Construction output was up 5.1 percent month-on-month.
“In January, favorable weather conditions allowed builders to carry out all construction work without restrictions, and production increased by 5.4 percent year-on-year. Growth was driven by building construction, which recorded year-on-year growth of 7.9 percent. Engineering construction production fell by 4.2 percent year-on-year ,” said Petra Cuřínová, head of the CZSO's construction and housing statistics department.
Building authorities issued 6,241 building permits in January, which was 7.4 percent less year-on-year. The indicative value of permitted buildings grew by 35.8 percent to 45.6 billion crowns. “The January increase in the indicative value was influenced by the approval of important constructions of transport infrastructure and also non-residential buildings. After their model exclusion and taking into account the price development, the indicative value will reach the level of January 2022,” noted the director of the Department of Agriculture and Forestry, Industry, Construction and Energy Statistics of the CZSO .
The number of apartments started in January fell by 8.8 percent year-on-year to 2,687 apartments, the number of completed apartments was lower by 15.4 percent, amounting to 2,981 apartments.
Construction companies according to statistics the lack of employees continues to be a problem. The average registered number of employees in the construction industry decreased by 0.9 percent year-on-year, their average gross monthly salary increased by 14.9 percent year-on-year.
