PRAGUE, Sept 6 (Reuters) - Czech manufacturing output lagged
forecasts in July, showing a slowdown in growth, while retail
sales dropped and the trade surplus shrank.
Czech industry expanded by 5.3 percent in July versus a year
earlier, below expectations of a 7.5 percent rise after revised
9.0 percent growth in the previous month, Czech Statistics
Office data showed on Monday.
Retail sales dipped by 1.0 percent year-on-year in July,
below analysts' forecast for annual stagnation, the statistics
office said.
Data also showed foreign trade posted a 6.3 billion crown
($334.6 million) surplus in July, less than analysts' forecast
for a 7.0 billion surplus.
Exports rose 16.0 percent year-on-year, the ninth rise in a
row. Imports grew by 20.5 percent.
Separate data showed construction output fell 4.5 percent in
July, after a revised 4.2 percent decline in June.
**************************************************************
KEY POINTS:
(change in percent) July June July fcast
RETAIL SALES (y/y) -1.0 7.0 (6.6) 0.0
INDUSTRIAL OUTPUT July June July fcast
Real pct change y/y 5.3 9.0 (9.7) 7.5
Industrial sales 7.8 12.1(12.0) n/a
FOREIGN TRADE
(in bln CZK) July June July fcast
balance 6.3 8.71 (10.42) 7.0
(nominal y/y change in pct)
exports 16.0 19.2 (19.7) 14.8
imports 20.5 27.6 (28.0) 19.1
Details of July retail sales data...............[]
Details of July industrial output data..........[]
Details of July foreign trade data..............[]
COMMENTARY:
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
"Czech data releases for July output and trade came in
slightly below the market expectations but I do not see them as
a really negative surprise."
"July was facing negative calendar effect (two less working
days year-on-year) and such factor simply has an adverse impact
on industrial output, exports or retail sales."
"Furthermore, it is worth noting that the base effect is
also becoming less favourable in second half of this year and
will be somewhat curbing the year-on-year dynamics of growth in
production and trade.
"Still, if we look at industry, sales and new orders were
not bad at all. Exports (as part of foreign trade statistics)
actually came in slightly better than what I was expecting."
"Overall, I think that July numbers actually confirm the
story expected by the market, i.e. that growth dynamics will
gradually decelerate in rest of the year, tracking the expected
development in key export destinations, the euro zone, but that
the growth of activity in economy will continue in general."
MIROSLAV FRAYER, ECONOMIC & STRATEGY RESEARCH, KOMERCNI
BANKA
"The result was somewhat worse than we expected... The
reason was mainly the lower number of working days in comparison
with last year's July."
"It is being confirmed that in the past months when retail
sales were growing at a fast pace, it was mainly because of car
sales. It is therefore preliminary to talk about sustainably
growth in consumer demand, when in other sectors retailers are
not doing that well.
PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK, PRAGUE
"Same as in Germany in June, industrial output slowed in the
Czech Republic in July.
"The Czech industry is still very dependent on the
development of industrial output and orders in Germany and the
July figures only confirm that.
"The July year-on-year drop in the pace of output growth is
also significantly affected by the lower number of working days
compared with the last year (by two)."
PETR DUFEK, ANALYST, CSOB
"The result of foreign trade is weaker, but regarding the
trend it still follows the previous development. While prices of
resources helped to boost the surplus last year, it is the
opposite this year. Furthermore, there is higher demand for
components and parts for reexport, which can be taken as a
positive sign.
"Overall, we do not change our view of the trade balance and
I expect a surplus of 150 billion crowns for the whole year."
JIRI SKOP, ANALYST, KOMERCNI BANKA
The foreign trade surplus in July disappointed only slightly
... On the other side, the export dynamic has stayed very solid,
with exports showing growth of 16.6 percent year-on-year, which
is a result of a lower statistical base from last year but also
a pick-up abroad."
"Imports of course rose significantly, by 20.9 percent. From
the perspective of structure, the balance of commodities
improved... which compensated for a worsening in the previous
two months."
"In all, foreign trade is doing very well."
MARKET REACTION:
The crown currency was a touch stronger after the data at
24.650 to the euro <EURCZK=> from 24.670 just before the
releases.
DETAILS:
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 1.3 percent month-on-month, and rose 2.1
percent year-on-year in July.
INDUSTRIAL OUTPUT
- Industrial output rose 5.3 percent year on year in July,
versus revised 9.0 percent in June.
- Overall new orders rose 10.0 percent year-on-year, and new
orders from abroad increased by 11.9 percent.
- Orders grew mainly thanks to a 34.5 percent rise computers,
optical devices and electronics orders.
FOREIGN TRADE
- Imports grew faster than exports for a fifth straight months,
the statistics office said.
BACKGROUND:
- Market expectations before release []
- Slovak June trade figures []
- July consumer inflation [] []
- June industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
- For further details on July 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)
