In a concerning trend for the Czech economy, industrial production in the country has recorded its fifth consecutive month of decline. According to the latest data released by the Czech Statistical Office (ČSÚ) on Friday, July saw a year-on-year decrease of 1.9% in industrial output, a slight improvement from June’s 3.3% drop.
The value of new orders also fell by 1.8% compared to the same month last year, indicating ongoing challenges in the sector. Month-on-month, industrial production decreased by 0.8% in July.
Radek Matějka from ČSÚ noted that the decline was primarily due to shifts in company-wide holidays in the automotive industry. However, he added a silver lining, stating, “On the other hand, several sectors, such as food production, showed year-on-year growth in July.”
The downturn continued in the production of basic metals, metallurgy and foundry, as well as in the mining of black and brown coal. Machine and equipment manufacturing also saw lower production, although the value of new orders in this sector increased in July.
Petr Smutný from PwC offered a sobering perspective on the situation: “Good news from Czech industry is still as rare as hen’s teeth, and the signals we’re receiving from the market don’t suggest any dramatic improvement by the end of the year. The drivers of economic growth remain the winners that emerged from the crises of recent years, primarily energy and arms companies.”
As the Czech industrial sector grapples with these challenges, all eyes will be on future data releases for signs of a potential turnaround.