INSTANT VIEW 1-Czech Dec PMI steadied at solid pace

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KEY POINTS: 
                                   DEC 07     NOV 07    DEC 06 
 Purchasing Managers' Index        55.0       54.9      56.2 
 Output                            57.0       56.6      58.9 
 New orders                        56.7       56.4      57.2 
 
 (Full table of data...............................[nPRA001684]) 
 
- A figure above 50 indicates expansion on the previous month 
while a number below 50 signals contraction. 
- The headline index has held above the neutral mark of 50.0 
since March 2003. 
- The Czech manufacturing sector continued to record solid 
growth in December. The rates of expansion of output, new orders 
and employment all strengthened slightly, although rates of 
expansion over the fourth quarter as a whole were generally 
weaker than in the preceding three-month period. 
- Over 2007 as a whole, the PMI averaged 56.8 - the highest 
overall figure for any full calendar year in the survey's 
history. Growth of Czech manufacturing production regained some 
of the momentum lost during the second half of 2007 in the final 
month of the year. The overall increase in output was broadly in 
line with the strong historic average for the survey. 
- Output moved up for the first time in five months in December, 
to 56.9, from November's 56.6. That signalled a slight 
acceleration in the rate of growth of production and strong 
overall expansion that was in line with the survey's historic 
average. 
- The new orders index rose fractionally to 56.7 in December, 
from 56.4 in November, signalling the fastest increase in new 
work for three months. Firms reported that demand for their 
products continued to rise, and a number mentioned expanded 
customer bases. That said, on a quarterly basis, average growth 
of new business in Q4 has been the weakest since the second 
quarter of 2005. 
- Input prices down only marginally from November's ten-month 
high of 63.5, at 63.3 - well above the long-run average of 55.3. 
Survey respondents quoted a range of raw materials as being up 
in price since November, including paper, metals and grain, 
while energy costs also rose - reflecting high oil prices. 
- New export orders fell to 52.6, from 56.2 in November, 
signalling a moderate rate of expansion that was the weakest 
since June 2005. 
- Employment remained above the no-change mark of 50.0 in 
December, extending the current period of job creation to 
two-and-a-half years. Moreover, the rate of workforce expansion 
accelerated to its highest in four months. Recruitment was 
linked by firms to expanded capacities and rising production 
requirements. 
- Data released by NTC Research and ABN Amro. 
 
COMMENTARY: 
    DEBBIE ORGILL, SENIOR ECONOMIST, ABN AMRO, LONDON 
    "The Czech PMI survey for December continues to buck the 
regional trend of weaker activity in December. The domestic 
demand situation appears to be holding up relatively well, 
whereas exports are suffering under a firming exchange rate. 
High price trends however continue to support the monetary 
tightening cycle which we expect to continue during H1 of 2008." 
 
BACKGROUND: 
- Report on most recent interest rate decision...[ID:nL19397016] 
                 [ID:nPRG000640] [ID:nPRA001675] [ID:nPRA001683] 
- October foreign trade figures...................[ID:nL0594409] 
- October industrial output......................[ID:nL11393445] 
- Third-quarter GDP growth data..................[ID:nL07435890] 
                                                 [ID:nL07657597] 
 
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 (Reporting by Mirka Krufova; Editing by Ruth Pitchford) 
  
  Keywords: MANUFACTURING PMI/CZECH  
    

[PRAGUE/Reuters/Finance.cz]