Czech manufacturing industry is in good condition, despite the July m/m Purchasing Managers’ Index decline. The information was released by IHS Markit.
Purchasing Managers’ Index in manufacturing in July decreased below the June’s level. However, July’s cool down doesn’t look bad, PMI is still above 50 points, which signals an improvement in manufacturing.
Manufacturers’ optimism results both from full order books and huge client lists. Expansion in production is robust, however the monthly pace of growth is milder. The need to supply the workforce for Czech factories keeps the human resources departments, labor offices and online job portals active. Despite the continuing employment growth in the Czech manufacturing since May 2013, companies are offering increasingly more vacancies. Labor office registered more than 40K vacancies in June.
Both input and output prices are under pressure. However, their pace of growth is decelerating. Input prices increased especially due to more expensive raw materials. Both higher input prices and stronger product demand have affected the output prices.
PMI decreased monthly, on the other hand, the y/y comparison shows, that the Czech manufacturing is “in full swing”, which is likely to be reflected both in the industrial production results and the ensuing economic growth.