The Czech industrial sector faced a significant setback in November, with production falling by 2.7% year-on-year and 1.5% compared to October, according to the Czech Statistical Office.
The decline, marking the second consecutive month of negative growth, was primarily driven by the automotive sector and vehicle parts manufacturers. The automotive industry recorded a substantial 7.1% decrease, highlighting deeper structural challenges in European manufacturing.
While some relief came from non-metallic mineral products and pre-holiday manufacturing surges, the overall outlook remains concerning. New orders dropped by 1.4%, suggesting continued pressure on the sector.
Petr Dufek, Chief Economist at Creditas Bank, points to the automotive sector’s struggles with electromobility plans, noting that without additional financial incentives, consumer preferences are creating market resistance. The industry faces additional headwinds from weak domestic and foreign demand.
However, there’s a silver lining from Germany, Czech Republic’s main trading partner, where industrial production and exports exceeded expectations in November, showing increases of 1.5% and 2.1% respectively.