INSTANT VIEW 1-Czech Dec PMI best for over three years

                                
 PRAGUE, Jan 3 (Reuters) - The Czech Purchasing Managers'
Index (PMI) showed the best industrial sector performance since
August 2007 in December, rising to 58.4 from November's 57.3.
                                
 The December reading was the fourth-highest in the survey
history, the survey provider Markit Economics said.
                                
 Growth of both output and new orders strengthened over the
month, while firms continued to take on staff at a strong pace.
Pressure on manufacturers' input prices continued to escalate.
                                
 Output has risen for the past 17 months and remained well
above its long-run trend of 54.9.
                                
 New orders also grew for the 17th successive month. The rate
of expansion strengthened over the month for the first time
since September, and remained much sharper than the long-run
survey average. 
                                
 Firms reported strong demand from both domestic and export
markets during the month.
                                
 
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KEY POINTS:                       12/10      11/10     12/09
Purchasing Managers' Index        58.4       57.3       50.8
Output                            60.5       58.4       52.1

(For table, double click on......................[ID:nPRA005395]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
 
COMMENTARY:
                                
 MURAT ULGEN, HSBC CHIEF ECONOMIST, CENTRAL & EASTERN EUROPE
and SUB-SAHARAN AFRICA
                                
 "Manufacturing conditions in the Czech Republic improved
further in December, reflecting the upturn in global trade
activity that is observed during the last quarter of 2010.
                                
 The headline index was above 50.0 for the 14th month on the
trot with the pace of expansion also accelerating during the
month. This improvement was driven by strong increases in both
the output and the new orders components.
                                
 The strength of demand continues to raise the possibility of
inflationary pressures building up in the future, with both
input and output prices continuing to rise.
                                
 Strength of demand in the main trading partners was also
reflected in a continued rise in the new export orders index.
                                
 The employment component retreated slightly during the month
as manufacturers continued to add to their labour force, albeit
at a slower pace than in November. Despite the decline from the
previous month. The employment index remains close to pre-crisis
peaks."
 
BACKGROUND:
- Report on last Czech c.bank rate decision......[ID:nLDE6BL1NL]
                                
                                              [ID:nLDE6BL0ZL]
- October foreign trade figures..................[ID:nLDE6B608H]
- October industrial output......................[ID:nLDE6B608H]
- Third-quarter GDP data.........................[ID:nLDE6B816Z]

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- 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)