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PRAGUE, April 1 (Reuters) - Czech manufacturing slowed its
decline in March from the previous month but still marked a very
weak first quarter, data from Markit Economics and ABN Amro
showed on Wednesday.
The Czech Purchasing Managers' Index (PMI) inched up to 34.0
in March, from 32.6 in February and a record low set in January.
It was only the second rise in the last year and was still well
below the critical 50.0 mark for the ninth consecutive month.
The output component fell sharply in March, also extending
the current sequence of falling production to nine months.
Although the latest fall was the least extreme since
November, the first quarter as a whole pointed to a much steeper
rate of decline than the previous two quarters, Markit said.
It said new orders continued to contract rapidly, albeit at
the slowest rate since last November. New export orders also
fell sharply, reflecting weakening demand from Western Europe.
Employment fell to a new record low, indicating the fastest
rate of decline in staffing since the survey began in July 2001.
Redundancies were linked to the need to remain productive in the
face of sharply falling new orders, Markit added.
Also on Wednesday, Poland's March PMI data, also compiled by
Markit, edged up to 42.2, versus 40.8 in February.
In Hungary, PMI data compiled slipped slightly to 39.5, from
39.7 in February. That data is compiled by different methodology
than the way Markit calculates the Polish and Czech figures.
****************************************************************
KEY POINTS:
03/09 02/09 03/08
Purchasing Managers' Index 34.0 32.6 57.4
Output 33.4 30.2 60.7
(For full table, double click on................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
SIMON QUIJANO-EVANS, CEE ECONOMIST, CHEUVREUX
"We are seeing a stabilisation of leading indicators in the
Czech Republic. But we need a couple more months to be make a
conclusion."
"This may be influenced by car exports to Germany (after the
scrap subsidy introduction)... You'll need a couple more months
to see if this is a one-off."
"But no bad news is good news. Also companies have cut down
on stocks in recent months, so we may be seeing indications of a
possible increase in stocks or plans to do so."
NEIL SHEARING, ECONOMIST, CAPITAL ECONOMICS
"The bigger point is that it's good news that there's been a
bounce in these PMIs, but they are still consistent with sharp
falls in annual rate of industrial production."
"One hand, it's good news that things weren't quite as bad
as they were at the start of the year, but it's far too soon to
give a green light to recovery."
"It was always going to be the case that the recession would
start in industry and then spread throughout the rest of the
economy."
"What we were going to see was the slowdown spreading
through industry, especially in countries like the Czech
Republic which are very export dependent, that the slowdown
starts in industry and the external sector and then it starts to
spread through the rest of the economy."
"So as firms have to lay off workers and real incomes start
to fall, then it spreads into retail. And as firms start to
scale back their capital spending programmes in response to
lower global demand and tight credit conditions, you get a fall
in investment."
"The precondition to recovery is a pickup in demand from the
euro zone, really -- a sustainable improvement of those
conditions, and I think we're still a good ways from that."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The number shows that the greatest hit for the Czech
economy came in January and February.
"Statistics from overseas, Europe as well as the Czech
Republic, started to be rather mixed in March."
"I would not say it is some improvement of the situation,
but I would say it is the end of the decline (in the index)."
"PMI below 50 points is still negative and shows a
contraction, but the contraction is not accelerating."
TIMOTHY ASH, HEAD OF RESEARCH (CEEMEA), RBS
"This data continues to paint a picture of a rapidly slowing
economy and would suggest that hopes of real GDP growth in 2009
are overly-optimistic."
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] []
- January foreign trade figures...................[]
[]
- January industrial output........................[]
- Fourth-quarter GDP growth 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 **
With immediate effect detailed PMI data are only available
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(Reporting by Mirka Krufova; Editing by Michael Winfrey)
