Czech manufacturing growth improved more-than-expected in March on stronger growth in new orders, purchasing activity and employment, extending the current upturn to nearly two years, survey data from Markit Economics revealed Wednesday.
The HSBC Manufacturing Purchasing Managers’ Index for the Czech manufacturing sector rose to 56.1 from 55.6 in February. Economists had expected a score of 55.9.
A PMI reading above 50 indicates growth in the factory sector. The latest score equaled January’s six-month high and the sector for the 23rd month running.
New orders increased for the 22nd consecutive month and at the fastest rate since January as well as at an above-average pace for the survey.
The growth in new exports orders were weaker than that for overall work, mainly due to weak demand from Russia and Ukraine. However, firms reported rising demand from Europe, North America and Africa.
Factory output grew for the twenty-fourth straight month, although at the slowest pace in three months. Combined with stronger inflows of new work, this added more pressure on capacity and led to a faster build up in backlogs.
Consequently, factories raised staff levels at the fastest pace in nearly four years. Purchasing activity was scaled up sharply in March, leading to a the biggest gain in input stocks in eight months, partly due to strategic stockpiling.
Average input costs rose slightly for the first time in three months, mainly due to the stronger dollar against the koruna. Output prices were broadly unchanged from February.
“The Czech manufacturing sector has seen strong growth throughout the first three months of the year, with one of the highest PMI readings on a quarterly basis of the past four-and-a-half years,” Trevor Balchin, Senior Economist at Markit, said.
“This boost, compared with a deceleration in the fourth quarter of last year, lends support to the CNB’s view that economic growth will accelerate gradually following a slowdown in late-2014.”
Further, the economist noted that a wider European recovery in 2015, as suggested by the strong March reading from the Flash Eurozone PMI, should provide further support to Czech manufacturing growth.
The material has been provided by InstaForex Company – www.instaforex.com