Industrial production in the Czech Republic grew by 1.3 percent year on year in October. It thus grew for the first time since May 2019. Car production mainly contributed to this. This follows from data adjusted for the effect of the number of working days, which was published by the Czech Statistical Office (CSO) on Tuesday. The industry grew by three percent month-on-month.
The industry has been declining year on year for 16 months in a row. It was about two percent in September, but in April, during the first wave of coronavirus, the decline was more than a third.
“Production data for October surprised slightly positively. We expect a weaker figure for November, but it should not be dramatic at all. “For this year, we expected a drop in industrial production of around 10 percent, but the latest data show that the result could be rather close to -7 percent,” he adds.
Miroslav Novák, an analyst at Akcenta, has a similar opinion. “Indices of business sentiment indicate a solid development of industrial production for the very end of this year, although there will be some slowdown due to the second wave of the pandemic,” says Novák.
The reason for better development is mainly the automotive segment. “It is trying to catch up, at least in part, with the spring outage in production,” said Radek Matějka, director of the CZSO industry statistics department. In October, car production increased by almost 14 percent year on year.
This was also reflected in the Czech Republic’s foreign trade, which ended in October with a surplus of 33.4 billion crowns, a year-on-year increase of 24.4 billion. The growing exports of motor vehicles and trade with Germany and Russia had a particularly positive effect on it. The foreign trade balance is positive for the fifth month in a row, reaching a surplus of 142.1 billion crowns in the first ten months of this year, which is 400 million more than the same period a year ago.
Compared to last October, exports increased by 5.6 percent to 359.6 billion crowns, while imports fell by 1.7 percent to 326.2 billion crowns.
The construction industry accelerated the year-on-year decline
“Unlike the construction industry, the second wave of coronavirus has not yet significantly affected the industry,” said Matějka from the CZSO.
Construction output in the Czech Republic accelerated its year-on-year decline in October. It fell 10.5 percent after a revised decline of 7.9 percent in September. Building construction, which includes the construction of apartments, offices or warehouses, fell by 13 percent compared to the same month last year. It fell by 8.8 percent in September. Civil engineering, especially transport construction, slowed down the year-on-year decline to 4.8 percent in October from 5.8 percent in September.
The construction industry continued to be affected by the coronavirus epidemic in October, said Petra Cuřínová, head of the CZSO construction and housing construction statistics department. “Construction production is held by large companies in civil engineering, building construction is in decline in both size segments. Building authorities also report limited operations and permitting processes are stagnant,” she added.
Compared to September, October construction output was 1.7 percent lower after seasonal effects.
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