PRAGUE, Dec 7 (Reuters) - Czech industrial output rose below
forecast in October and retail sales lagged expectations, while
exports and the trade balance beat forecasts, data showed on
Tuesday.
Czech industry expanded by 6.9 percent in October versus a
7.4 percent drop a year earlier, below expectations for a 10.0
percent rise. In September, industry grew by 12.4 percent after
a revision.
Retail sales unexpectedly dipped by 0.7 percent year-on-year
in October. Markets had expected an annual growth of 1.0
percent.
Data also showed foreign trade posted a 15.3 billion crown
surplus in October, above analysts' forecast for a 10.5 billion
surplus.
Exports rose 17.2 percent year-on-year, the twelfth rise in
a row. Imports grew by 19.4 percent, a tenth consecutive rise.
Separate data showed construction output fell 1.4 percent
year-on-year in October, after a revised 5.1 percent decline in
September.
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KEY POINTS:
(change in percent) Oct Sept Oct fcast
RETAIL SALES (y/y) -0.7 3.2 (3.5) 1.0
INDUSTRIAL OUTPUT Oct Sept Oct fcast
Real pct change y/y 6.9 12.4 (12.2) 10.0
Industrial sales 7.8 15.2 (14.9) n/a
FOREIGN TRADE
(in bln CZK) Oct Sept Oct fcast
balance 15.30 10.93 (12.35) 10.5
(nominal y/y change in pct)
exports 17.2 17.0 (17.7) 14.0
imports 19.4 21.9 (21.8) 19.0
Details of Oct retail sales data................[]
Details of Oct industrial output data...........[]
Details of Oct foreign trade data...............[]
COMMENTARY:
VOJTECH BENDA, SENIOR ANALYST, ING COMMERCIAL BANKING
"Exports remains very strong, which corresponds to the
positive development in Germany.
"Retail sales showed some decline which was given partially
by the lower number of working days. But consumer sentiment
shows positive development over the next two months, household
consumption and retail sales should not significantly decline in
the coming months."
"Industry number is volatile. There could have been a an
accumulation of some inventories, which corresponds with the
fact the imports slowed down."
"The low comparative base effect is gradually fading."
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT:
"New orders are maintaining a double-digit pace of annual
growth and business sentiment in German industry remains strong,
which sends positive signal regarding outlook of activity in
Czech industry for the months to come. All in all, foreign trade
statistics are very good and near-term outlook of Czech industry
is not bad at all.
"Weaker than expected results were reported from retail THE
sector where sales slightly declined in annual terms in October.
Although the decline was to some extent caused by adverse
calendar effects, even the adjusted growth of sales was muted.
"All in all, the data releases point to stable monetary
policy stance of the Czech National Bank for several months to
come. At the same time, if anything, the data are positive news
for the Czech crown, certainly the foreign trade statistics."
PETR DUFEK, ANALYST, CSOB:
"The industry result was influenced by a lower number of
working days. Orders look very promising with growth of 12.6
percent.
"Overall, the industry data promise good GDP number in the
last quarter. The recovery coninues. The retail sales are like a
see-saw, but that is mainly due to different bases in the last
year. We do not expect the retail to show any strong pace this
year and the next."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT:
"The picture in retail is consistent with what we had seen
in wage development yesterday, ie the wage development is
sufficient for keeping private consumption flat, but not for
growth.
"The other indicators do not reveal any secrets for the
markets or the central bank."
MICHAL BROZKA, ANALYST, RAIFFEISENBANK:
"Given the disadvantage of one working day (the industrial
output) is still a solid result. The market may be marginally
disappointed having expected 10.0.
"We expect full-year growth of 7.5 percent."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE:
"Domestic demand remains relatively limited, the data rather
supports the doves on the central bank board, so it supports the
view in favour of interest rate increases coming later rather
than sooner."
MARKET REACTION:
The crown traded at 25.00 to the euro <EURCZK=> after the
data, virtually flat from 24.99 earlier.
DETAILS:
INDUSTRIAL OUTPUT - Industrial output rose 6.9 percent year on
year in October, versus revised 12.4 percent in September.
- Overall new orders rose 12.6 percent year-on-year, and new
orders from abroad increased by 11.5 percent.
- Orders grew mainly thanks to a 22.4 percent rise in orders
of computers and electronics.
FOREIGN TRADE - The trade balance surplus rose to 15.3 billion
crowns in October from revised 10.93 billion in September
- Exports rose by 17.2 percent. Imports, which grew by 19.4
percent, outpaced exports for the eighth month running.
- In euro terms, imports rose by 25.8 percent, exports rose
by 23.5 percent.
- Trade balance was lower by 1.1 billion crowns compared
with a year ago due to a 1.7 billion crown deterioration in
fossil fuels deficit and 1.6 billion worsening of the chemicals
gap.
- Overall exports of machinery and vehicles rose 18.2
percent.
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
dipped by a real 0.3 percent month-on-month, and rose by 1.0
percent year-on-year in October.
BACKGROUND:
- Market expectations before release []
- Slovak September trade figures []
- October consumer inflation [] []
- September industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
- For further details on October 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 Jana Mlcochova)
