PRAGUE, Oct 7 (Reuters) - Czech manufacturing output
exceeded forecast in August while the trade surplus dropped on
machinery imports, suggesting a continued economic recovery,
Czech statistics office data showed on Thursday.
Separate retail sales data were broadly in line with
forecast, showing a mild rise.
Czech industry expanded by 12.9 percent in August versus a
9.4 percent drop a year earlier, and above expectations for an
8.0 percent rise. In July industry grew by 5.3 percent.
Retail sales rose by 2.8 percent year-on-year in August,
broadly in line with analysts' forecast for annual growth of 2.7
percent.
Data also showed foreign trade posted a 0.54 billion crown
surplus in August, much less than analysts' forecast for a 5.3
billion surplus.
Exports rose 23.0 percent year-on-year, the tenth rise in a
row. Imports grew by 30.1 percent, an eighth consecutive rise.
Separate data showed construction output fell 2.1 percent in
August, after a 4.5 percent decline in July.
**************************************************************
KEY POINTS:
(change in percent) Aug July Aug fcast
RETAIL SALES (y/y) 2.8 -1.0 2.7
INDUSTRIAL OUTPUT Aug July Aug fcast
Real pct change y/y 12.9 5.3 8.0
Industrial sales 14.4 7.8 n/a
FOREIGN TRADE
(in bln CZK) Aug July Aug fcast
balance 0.54 6.34 5.3
(nominal y/y change in pct)
exports 23.0 16.0 15.7
imports 30.1 20.5 19.9
Details of Aug retail sales data................[]
Details of Aug industrial output data...........[]
Details of Aug foreign trade data...............[]
DETAILS:
INDUSTRIAL OUTPUT - Industrial output rose 12.9 percent year
on year in August, versus 5.3 percent in July.
- Overall new orders rose 22.1 percent year-on-year, and new
orders from abroad increased by 20.6 percent.
- Orders grew mainly thanks to a 18.2 percent rise in orders for
vehicles.
FOREIGN TRADE - The trade balance surplus shrank sharply to
0.5 billon crowns as exports surged by 30 percent.
- Imports outpaced exports for the sixth month running.
- In euro terms, imports rose by 34.5 percent, exports rose by
27.1 percent.
- Trade balance worse by 8.6 billion than a year ago, due to a
6.1 billion deterioration in machinery balance and 3 billion
worsening of the minerals deficit.
- Overall imports of machinery and vehicles rose 41.8 percent,
especially of electronics, computers and telecommunication
equipment.
RETAIL SALES - The headline, unadjusted figure includes
retail sales plus car sales and repairs, as well as fuel sales.
- Seasonally-adjusted retail sales including fuels and cars
dipped by a real 0.9 percent month-on-month, and rose by 1.1
percent year-on-year in August.
COMMENTARY:
JAN VEJMELEK, HEAD OF ECONOMIC & STRATEGY RESEARCH, KOMERCNI
BANK
"August industrial output meant a big surprise for us, we
were worried of some negative impact from the August floods on
industrial activity."
"The sector is clearly benefiting from a recovery abroad,
mainly the car segment, the metals industry and the electronics
industry are doing well."
"A rise in new orders is also an encouraging element for a
future development."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"The outcome of industry and exports suggests that the Czech
economy is stronger than generally believed. It may be the case
that the third quarter GDP could accelerate from the second
quarter, measured by year-on-year data."
"It is a cyclical situation, also supported by swift pace of
growth in Germany and sharing the German exports boom through
Czech subcontractors."
"A local factor is the photovoltaic investment boom, which
is very likely reflected in the acceleration of imports. Imports
grew more than 30 percent, and I am pretty sure it is also from
imports of solar panels."
MARKET REACTION:
The crown <EURCZK=> weakened a touch to trade at 24.45 to
the euro after the data from 24.445 earlier.
BACKGROUND:
- Market expectations before release []
- Slovak July trade figures []
- Aug consumer inflation [] []
- July industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
- For further details on August retail sales, industrial output
and foreign trade 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>
(Reporting by Jana Mlcochova)
