POLL-Czech outptut drop seen easing in Oct

                                
 * What: October industrial output flash estimate
                                
 * When: Due by Dec. 3
                                
 * Median forecast for -8.0 pct y/y, base effects slow drop
                                
 
                                
 PRAGUE, Nov 26 (Reuters) - Czech industrial output likely
fell at its slowest pace in a year in October due to base
effects and an improving outlook for key trade partner Germany,
a Reuters poll showed on Thursday.
                                
 The Czech Republic's export-oriented manufacturers have
struggled to win back orders lost in the last year in the
economic crisis, and have cut jobs as they do not see any strong
recovery ahead.
A Reuters poll of 15 analysts showed a median forecast for
October industrial production to have fallen 8 percent
year-on-year, decelerating from a 11.9 percent fall in the
previous month and just better than a 8.4 percent drop in
August.
                                
 "The pace of annual contraction in Czech industrial output
should have decelerated significantly in October due to base
effects as industrial activity was weakening substantially a
year ago," said Radomir Jac, chief analyst for Generali PPF
Asset Management.
He added that economic sentiment surveys from Germany,
central Europe's strongest trading partner, showed the economy
there was in good shape despite the loss of car scrapping
subsidies this quarter that had lifted the region's auto sector.
                                
 "This should be also supportive to the performance of Czech
industry and we expect that the annual contraction of Czech
industrial output will be mild in the fourth quarter of this
year, roughly at minus 2 percent," Jac said.
                                
 The Czech economy dropped 4.1 percent year-on-year in the
third quarter, improving from a 4.7 percent contraction in the
previous three months. 
                                
 The central bank sees the economy dropping 4.4 percent this
year before rebounding with 1.4 percent growth in 2010.
                                
 However, unemployment at more than a three-year high is 
expected to rise further before cooling off, dousing domestic
demand.
                                
 Carmakers have reported full order books for the final
quarter of the year and steelmakers have raised their production
levels but output will still remain below full blast.
                                
 "We remain far from being enthusiastic about prospects for
Czech output as the end of 'cash for clunkers' programme in
Germany is set to have negative consequences for the Czech car
manufacturing sector in the coming months," said Piotr Matys, an
analyst for 4Cast.
                                
 "Overall recovery in economic activity will be gradual and a
double-dip scenario cannot be excluded."
 (Reporting by Jason Hovet; editing by Philippa Fletcher)
 ((prague.newsroom@thomsonreuters.com; Reuters Messaging:
jason.hovet.reuters.com@reuters.net; +420-224 190 476))