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PRAGUE, July 1 (Reuters) - The Czech Purchasing Managers'
Index (PMI) was flat in June at 57.6, the eighth straight month
above the 50-point break-even level, Markit Economics data
showed on Thursday.
The data for the Czech manufacturing sector, compiled by
Markit for HSBC, pointed to the same strong rate of improvement
in overall operating conditions as that signalled in May.
Output and new orders both continued to rise rapidly, while
new export business increased at a survey-record pace, the data
showed. This supported further job creation in the sector, while
the latest findings also showed further marked inflationary
pressure on a wide range of inputs.
Rising prices for inputs reflected supply shortages,
resulting in a record lengthening of suppliers' delivery times
during the month, Markit said.
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KEY POINTS: 06/10 05/10 06/09
Purchasing Managers' Index 57.6 57.6 41.9
Output 60.1 58.5 44.1
(For table, double click on......................[]
- A figure above 50 indicates expansion on the previous month
while a number below 50 signals contraction.
COMMENTARY:
KUBILAY OZTURK, ECONOMIST FOR EMERGING EUROPE AT HSBC
"The headline Czech manufacturing PMI index edged up further
in June on the back of a slight pick-up in the pace of expansion
in output mainly thanks to renewed upbeat trend in export
orders, reflecting the ongoing recovery in external market
conditions, while a strong USD may have played a role here via
increased competitiveness of the Western European production
cycle, on which Czech manufacturing sector heavily depends."
"A negligible deceleration notwithstanding, the rate of job
creation remained encouragingly high, in line with the recent
notable decline in unemployment, although 1Q10 data points to a
continued slowdown in wage growth, underlining the possibly weak
private consumption over the course of 2010."
"Looking ahead, the negligible decline seen in the June EMU
manufacturing PMI and the slight positive surprise in business
climate in Germany suggest that near-term downside risks
emanating from the EMU sovereign-debt crisis may be limited."
"However, the impact of the latter remains to be seen,
particularly in the second half of the year when cyclical
recovery may lose steam and the effect of a tight fiscal
environment starts to kick in."
NEIL SHEARING, ECONOMIST, CAPITAL ECONOMICS
"The broad trend... is the increase in PMIs has probably
leveled off but will stabilise at relatively high levels,
consistent with reasonably high growth in industry."
"But the problem remains that it's not spreading to other
sectors. So it still remains a very unbalanced recovery."
"It might be the case that factors like the weak euro help
those like Czech and Slovak exporters in due course. But I
expect that to be outweighed by factors like the end of
car-scrapping schemes and so on. So I still remain cautiously
pessimistic."
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"The PMI index stayed unchanged... For the future there is a
risk of some economic dampening because there is a need to
consolidate public finances. It is not only our problem but also
a problem of the entire euro zone and the world."
"Looking at similar indicators in other countries, it shows
that investors are beginning to perceive the risk of the
slowdown in the economic activity in the second half of the
year."
"After solid growths in past month, we can expect a moderate
decline in the index... but not below the 50 percent mark that
distinguishes contraction from expansion."
BACKGROUND:
- Report on last Czech c.bank rate decision......[]
[] []
- April foreign trade figures....................[]
- April industrial output........................[]
- First-quarter preliminary GDP 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 **
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; editing by Michael
Winfrey)
