** This data is protected by copyright - please see
<PMI/DISCLAIMER>. For further information on changes to
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PRAGUE, April 1 (Reuters) - The Czech Purchasing Managers'
Index (PMI) rose to a two-year high in March, growing for the
fourteenth straight month, Markit Economics data showed on
Thursday.
PMI rose to 56.8, from 54.3 in February and was positively
influenced by all five component indices in March. Contributing
to the 2.5 point rise in the headline figure was new orders by
1.5, output by 0.5 and employment 0.5. The index has been above
the neutral 50.0 mark since November.
Growth of new orders was maintained for the eighth month
running in March. The rate of growth accelerated to a two-year
high, driven by robust domestic demand and the fastest expansion
in new export business for over three years. Panellists
specifically mentioned Germany and other EU economies as sources
of export growth during the month.
The faster increase in new orders resulted in a stronger
rate of output growth and a rise in employment in the sector in
March. Production has increased for the past eight months, and
growth remained above the long-run survey average in the latest
period. Meanwhile, having been unchanged in size in February,
the manufacturing workforce posted its first monthly expansion
since June 2008.
The export market was a key source of improving demand. New
export orders grew at the fastest rate since February 2007.
****************************************************************
KEY POINTS: 03/10 02/10 03/09
Purchasing Managers' Index 56.8 54.3 34.0
Output 60.2 58.4 33.4
(For table, double click on......................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
MARKET REACTION: The crown <EURCZK=> edged up to 25.345 per
euro by 0754 GMT from 25.37 before the data.
COMMENTARY:
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"It is in line with similar indices abroad, like Germany or
the euro zone. Czech PMI shows a similar picture."
"Industry is rebounding but we will see in the months ahead
whether it is temporary or sustainable. Still, from real
figures, it is clear the real economy is driven by fiscal
stimulus, like scrapping schemes from last year. It is a
question if it is only temporary or sustainable."
VOJTECH BENDA, SENIOR ECONOMIST, ING PRAGUE
"It's one of the data figures showing the double-track
character of the economy, with the export-oriented part starting
to recover in a relatively solid way thanks to foreign demand.
On the other hand, weak domestic demand is a brake for the
economy."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"PMI improved again. It's another sign that recession is
definitely over."
"PMI is improving at all levels, not only new orders but
also employment helped lift the index."
"But looking at PMI around the world, I would say that
optimism maybe went too far because economic fundamentals are
not as strong as PMI. Looking at, for example, industrial output
in Germany, every month the data is mixed and there is no
obvious uptrend. I wouldn't bet on good PMI in the months to
come."
KUBILAY OZTURK, ECONOMIST FOR EMERGING EUROPE AT HSBC
"Czech manufacturing improved encouragingly in March, with
output and new orders reaching two-year highs and export orders
appearing to have jumped sharply, mimicking the similar trend
seen in the Eurozone and Germany, probably on the back of
weakness in euro. More important, the improvement this time
seems more broad-based".
"Companies have started to take on new employees, suggesting
unemployment may peak sooner than expected. Despite further
softening in output prices, input costs surged again over the
month, pointing to possible supply-side inflationary pressures
later in the year. That may keep the CNB from further easing,
although the Board's stance appears to have tilted slightly
dovish at its March meeting".
"All in all, external markets remained supportive in March,
but the gradual nature of the recovery in Western Europe and
recent deterioration in confidence indicators still pose
uncertainty over the sustainability of the positive momentum."
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] [] []
- January foreign trade figures..................[]
- January 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; Editing by Toby Chopra)
