Czech industry is gradually rising from the largest decline caused by a coronavirus pandemic.
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In July, after adjusting for the effect of the number of working days, industrial production fell by 5 percent year on year in real terms, but increased by 5.7 percent compared to June.
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The year-on-year change in industrial production was mostly due to the manufacture of fabricated metal products (down 10.1%), manufacture of machinery and equipment (down 9.3%) and manufacture of rubber and plastic products (down 7%).
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Industrial production increased in other manufacturing (growth by 7.7%), manufacture of paper and paper products (growth by 6.7%) and production and distribution of electricity, gas and heat and air conditioning (growth by 0.4%) ).
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The value of new orders decreased by 3.6% year-on-year. New orders from abroad decreased by 1.6%, while domestic new orders decreased by 7.8%. The highest decline in orders is reported by a key branch of Czech industry, ie car production.
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The Czech Republic’s foreign trade ended July with a surplus of 13.4 billion crowns, which was 15.2 billion higher year-on-year and reached its highest value in the month under review. The decline in imports again contributed to the higher surplus.
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According to analysts, the state of the industry will gradually improve. However, the year-on-year decline will continue in the coming months and for the whole of this year, the decline may be as much as 15 percent. According to them, the industry will probably not reach the level before the coronavirus pandemic until 2022.
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“The year-on-year decline of ‘only’ by five percent means that the industry gradually returned to almost normal numbers from the total halt and shock in March and April. Unfortunately, at the same time we have seen a significant increase in the number of infected people in recent days and it is likely that the epidemiological situation will again complicate not only production but also the possibility of sales, operation of services and thus sales and consumption in the coming months, “he thinks. Petr Smutný, partner of the consulting company PwC Czech Republic.
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Worse news also came from Germany. The growth of industrial production in Germany slowed to 1.2 percent in July compared to the previous month from 9.3 percent in June. The data indicate that production cannot be expected to return rapidly to pre-coronavirus levels.
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The construction industry is also better
The decline in construction output in the Czech Republic slowed down slightly. In July, it fell by 10.4 percent year on year in real terms after a revised decline of 11.8 percent in June. In July, building construction, which includes the construction of flats, offices or warehouses, as well as civil engineering, including mainly transport infrastructure, deteriorated.
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