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PRAGUE, March 1 (Reuters) - The Czech Purchasing Managers'
Index (PMI) rose for the 13th month in a row to its highest in
almost two years in February, Markit Economics data showed on
Monday.
PMI rose to 54.3, from 53.1 in January, indicating the
strongest overall growth of the sector since March 2008. The
index has been above the neutral 50.0 mark since November.
Analysts expect rising exports this year will help the
economy expand around 1.5 percent after a 4.3 percent
contraction in 2009.
But any recovery is seen bumpy and low household demand will
drag on growth. The central bank expects the jobless rate to
peak in the first quarter of 2011 at more than 10 percent -- the
first time to reach that level since 2004.
The Markit data's employment component rose above the 50
mark that divides expansion from contraction in February for the
first time since June 2008. The survey said those firms that
took on more staff to cope with rising workloads were offset by
cuts at others.
Growth of new orders was maintained for the seventh
successive month in February. Data signalled robust demand from
both domestic and export markets, with Germany and France
especially cited as growth markets.
The Czech Republic like other export-driven countries in
central Europe is counting on an economic rebound in Germany and
the euro zone to lift it this year. It ended 2009 with a
contraction after six months of growth.
****************************************************************
KEY POINTS: 02/10 01/10 02/09
Purchasing Managers' Index 54.3 53.1 32.6
Output 58.4 56.2 30.2
(For table, double click on......................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
KUBILAY OZTURK, ECONOMIST FOR EMERGING EUROPE AT HSBC
"Czech manufacturing apparently gained more traction in
February. Output advanced at the fastest pace in nearly two
years. Both domestic and external markets appear to have
supported growing demand, and the magnitude of improvement in
the latter is encouraging.
"More important, job shedding has finally ended, auguring
well for private consumption. Despite a whopping increase in
input prices, output prices continued to retreat, underlining
the lack of any meaningful demand-side pressure on inflation.
"Combined with the sizeable downside surprise in Q4 2009
growth, that underscores the need to maintain monetary stimulus
for now by leaving rates at 1.0 percent. All in all, the release
is upbeat, especially following the better-than-expected EMU
manufacturing PMI in February. But whether the improvement can
be sustained hinges on economic recovery in Western Europe,
which is coming very gradually."
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK PRAGUE
"It is an improvement that was already indicated by the
(Czech statistics office) confidence data last weak."
"We shall see how the slowdown indicated in the German data
will affect the Czech economy."
"Overall we expect industrial production to grow by 5 to 6
this year... Despite the correction, the forecast that we have
for the euro zone and Germany still counts on some growth."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"It is positive that PMI is rising, however, the overall
picture now is rather mixed."
"Data coming from the euro zone economy are more negative
then they were in past months so despite the growth in PMI I
think it is necessary to remain cautious as for optimism in
coming months."
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"Although the figures are quite good there is still a risk
that we will see a double dip in the economy. Some figures show
a slowdown in economic activity."
"Some figures also from abroad, mainly from Germany, showed
a slowdown and this decline will affect the development in the
Czech economy."
MARKET REACTION:
Crown unchanged at 25.900 <EURCZK=> to the euro.
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] [] []
- December foreign trade figures.................[]
- December industrial output.....................[]
[]
- Fourth-quarter GDP 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 **
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 ++ 44 20 7260 2454.
(Reporting by Mirka Krufova and Jason Hovet)
