PRAGUE, June 7 (Reuters) - Czech manufacturing output
continued solid recovery in April, beating analysts forecasts,
but retail sales showed a sharp downturn that indicated poor
outlook for domestic demand.
Czech industry expanded by 10.9 percent versus a year
earlier in April, beating expectations for a 10.0 percent rise
after 10.2 percent growth in the previous month.
Retail sales fell by 4.5 percent year-on-year in April, more
than double the analysts' forecast for a 1.8 percent
contraction.
This marked a return to a decline in sales seen between
October 2008 and February.
Data also showed foreign trade posted a 15.39 billion crown
($709.9 million) surplus in April, higher than analyst forecasts
for 13.0 billion surplus.
Exports rose 13.0 percent year-on-year, the sixth rise in a
row. Imports rose by 12.9 percent, the fourth gain since
September 2008, the Czech statistics bureau added.
**************************************************************
KEY POINTS:
(change in percent) April March April fcast
RETAIL SALES (y/y) -4.5 3.8 (3.9) -1.8
INDUSTRIAL OUTPUT April March April fcast
Real pct change y/y 10.9 10.2 10.0
Industrial sales 9.7 5.5 (5.0) n/a
FOREIGN TRADE
(in bln CZK) April March April fcast
balance 15.39 17.57 (8.27) 13.0
(nominal y/y change in pct)
exports 13.0 12.3 (12.7) 12.9
imports 12.9 15.7 (15.8) 15.3
CZECH AVG WAGE Q1/10 Q4/09 Q1/09 2009
Monthly wage (nominal) 22,748 25,565 22,263 23,488
real change y/y (pct) 1.5 4.8 0.8 3.0
nominal change y/y 2.2 5.2 2.9 4.0
Details of April retail sales data..............[]
Details of April industrial output data.........[]
Details of April foreign trade data.............[]
Details of Q1 real wage.........................[]
COMMENTARY:
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT:
"All in all, the very rich data set release today shows that
Czech industry has been profiting from still healthy demand in
its key export destinations - but financial markets will be of
course asking for how long this may remain sustainable given
first that the Western Europe may lost part of its growth
momentum later this year due to introduction of fiscal austerity
measures and also due to at that time weaker support of
rebuilding of inventories.
"The data also show that household consumption in Czech
economy remains weak and we expect first sings of a very gradual
recovery in that area only in the third quarter of this year at
earliest. While the market now remains busy with news from the
Eurozone and Hungary, today's data releases from the Czech
Republic are themselves positive for the Czech crown and they
also indicate absence of any demand-led inflationary pressure."
PETER DRAXLER, HUMAN RESOURCES MANAGEMENT EXPERT, PWC
"Higher unemployment rates and limited company budgets are
still hindering more robust wage increases. Companies with
long-term strategies, however, also recognise the need to retain
key personnel in a time of declining orders."
"In some sectors, the release of low-income workers in
blue-collar jobs due to declining demand is contributing to wage
growth. Such dismissal improve the average result of wages in
the country."
"There is a definite influence in the fact that these
employees are being substituted in some sectors by temporary
employees, whose wages not captured in industry statistics."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"On one side it shows the Czech economy profiting from the
recovery in euro zone. Thanks to this the trade surplus is high.
"On the other hand, domestic demand is suffering. High
unemployment in the Czech environment plus household worries
over economic development lead to lower spending."
MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE
"The story remains the same. Recovery in the industrial
sector continues, which is positively affecting the trade
balance. Weakness is on the domestic side.
"In the end, output performance in April was more than two
percentage points higher than we expected. Further growth in
orders was positive."
"I don't expect any reaction to today's data on the crown or
rates."
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"April industrial production beat market expectations. The
gradual recovery of economic activity in our biggest trade
partners, mainly Germany, is translating to higher foreign
demand, from which the Czech economy is beginning to profit."
"It shows together with export activity that the situation
in the sector is starting to improve."
MARKET REACTION:
Crown flat from levels ahead of the data at 25.91 to the
euro <EURCZK=>.
BACKGROUND:
- Market expectations before release []
- Slovak March trade figures []
- April consumer inflation []
- March industrial output []
- April producer prices figures []
- Report on last Czech c.bank rate decision......[]
[] [] [] []
- For further details on April retail sales, industrial output,
foreign trade, Q1 real wage 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>
(Compiled by Jan Lopatka)
