The Czech industrial sector is experiencing significant headwinds, with October’s production falling 0.7% month-on-month and 2.1% year-on-year, bringing output back to levels last seen seven years ago.
According to Vít Hradil, Chief Economist at Cyrrus, the industrial sector has settled into a pattern of stagnation, alternating between modest gains and losses month to month. Production volumes remain comparable to those recorded in January 2024 and April 2017. Despite these concerning figures, the stagnation could be viewed as relatively successful given the dire state of industry in neighboring Germany.
The automotive sector, traditionally a driving force behind Czech industrial growth, has seen a 2% year-on-year decline. Industry expert Filip Pastucha from Deloitte points to a challenging outlook, citing German automakers’ struggles in key markets and their ripple effects on Czech suppliers.
While new orders have shown a 2% year-on-year increase, with international orders outpacing domestic demand, employment in the sector continues to contract, with October showing a 2% reduction in workforce compared to the previous year.
Looking ahead, Generali Investments’ Chief Economist Radomír Jáč projects an annual decline exceeding 1% for 2024, following last year’s slight contraction and suggesting a deepening downturn in Czech industrial production.