PRAGUE, Aug 6 (Reuters) - Czech manufacturing output
continued solid recovery in June although it slightly lagged
analysts forecasts, while retail sales showed a sharp upturn and
imports soared.
Czech industry expanded by 9.7 percent versus a year earlier
in June, slightly below expectations for a 10.0 percent rise
after 16.9 percent growth in the previous month.
Retail sales rose by 6.6 percent year-on-year in June, far
above analysts' forecast for a 1.4 percent growth.
Data also showed foreign trade posted a 10.4 billion crown
($552.3 million) surplus in June, lower than analyst forecasts
for a 18.5 billion surplus.
Exports rose 19.7 percent year-on-year, the eighth rise in a
row. Imports soared by 28.0 percent, the sixth gain since
September 2008, the Czech statistics bureau added.
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KEY POINTS:
(change in percent) June May June fcast
RETAIL SALES (y/y) 6.6 3.1 1.4
INDUSTRIAL OUTPUT June May June fcast
Real pct change y/y 9.7 16.9 10.0
Industrial sales 12.0 17.3 n/a
FOREIGN TRADE
(in bln CZK) June May June fcast
balance 10.42 12.07 (12.34) 18.5
(nominal y/y change in pct)
exports 19.7 24.2 (24.4) 17.2
imports 28.0 25.9 (25.9) 19.4
Details of June retail sales data...............[]
Details of June industrial output data..........[]
Details of June foreign trade data..............[]
*For more details on the data see below.
COMMENTARY:
PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK
"This is the third annual increase in retail sales in the
last four months and it seems so that the retail sector has
definitely found its bottom..."
"This is very good news for economic growth. In our economic
growth forecast for 2011, we assume household consumption will
grow, and thus, unlike this year, will help economic growth, and
this is despite the projected budgetary spending cuts. Today's
figures on retail sales for June are going in this forecast
direction."
RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT
"Foreign trade surplus came in lower than expected but there
is no disappointment on export side as growth of exports remains
fairly strong. The surprise came via really huge increase in
imports - mainly of transport means and the structure of
increase is worth of more detailed analysis. All in all, foreign
trade reports strong growth in exports and even further increase
in imports - although this is probably due to some one-off
factors, i.e. we are not talking about a new trend in domestic
demand and hence in imports to the Czech Republic.
"Industrial output came in quite in line with expectations.
Annual growth of new orders was not so shining in June when
compared to May but I think that this is mainly about monthly
volatility of new orders. That said, everybody expects some
deceleration of economic growth in euro zone for the second half
of the year and Czech industry and exports should be the same
case - but available business sentiment indicators signal still
very strong start into the third quarter.
"A clear surprise came from the retail sales side and
although the strong increase in sales was primarily driven by
the motor segment, the other groups (foods, non-foods) also
report positive annual increase in sales. Better than expected
news but we remain cautious as regards household consumption
performance. Although the worst is over as regards unemployment,
the wage growth remains muted and we expect de facto stagnation
or only marginal increase in household consumption for whole
2010.
JIRI SKOP, ANALYST, KOMERCNI BANKA
"The data was good overall. On foreign trade, the export
dynamic was quite good. The smaller surplus was mainly due to
high imports."
"We expect a slowdown in the second half in line with the
slowdown in the euro zone."
RETAIL SALES
- The headline, unadjusted figure includes retail sales plus car
sales and repairs, as well as fuel sales.
- Seasonally-adjusted retail sales including fuels and cars rose
by a real 3.1 percent month-on-month, and rose 5.2 percent
year-on-year in June.
INDUSTRIAL OUTPUT
- Industrial output rose 9.7 percent year on year in June,
versus 16.9 percent in May.
- Overall new orders rose 12.3 percent year-on-year, and new
orders from abroad increased by 6.4 percent.
- Orders in the vehicle making sector rose by 12.5 percent.
- Construction output, measured by a separate index, dropped by
4.7 percent year-on-year in June.
FOREIGN TRADE
- Data also showed the Czech foreign trade posted a 10.4 billion
crown ($552.3 million) surplus in June, smaller than analyst
forecasts in a Reuters poll.
- Exports rose 19.7 percent year-on-year, the eighth rise in the
row. Imports rose by 28.0 percent, the sixth gain since
September 2008.
BACKGROUND:
- Market expectations before release []
- Slovak May trade figures []
- June consumer inflation [] []
- May industrial output []
- Report on last Czech c.bank rate decision......[]
[] []
- For further details on June retail sales, industrial output
and foreign trade data and other past data, Reuters 3000 Xtra
users can click on the Czech Statistical Bureau's website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-vzo
- For LIVE Czech economic data releases, click on <ECONCZ>
- Instant Views on other Czech data click on []
- 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 Jan Lopatka)
