In March, industrial production in the Czech Republic rose by 2.2% year-on-year, according to the Czech Statistical Office. The production increase was primarily driven by the automotive industry, which saw production grow by 42% year-on-year and over 10% compared to the previous month. However, most other industrial sectors experienced a decrease in production compared to last year.
The decrease in industrial production was particularly pronounced in the production and distribution of electricity, gas, heat, and air conditioning, which decreased partly due to a high comparison base from last year when the output of coal-fired power plants increased. Other industries that experienced a decrease in production included the production of other non-metallic mineral products, the chemical industry, metallurgy and foundry work, and mining and quarrying, where production decreased by a fifth year-on-year.
Despite the overall increase in industrial production, the value of new orders decreased by 1.7% compared to the previous year. This decrease was partially driven by a 5% decrease in orders from foreign customers, while domestic orders increased by 5.6%. According to the Czech Statistical Office, the value of new orders in the industrial sector has decreased for the sixth consecutive month monthly.
The decrease in the value of new orders was particularly pronounced in the metalworking, metallurgy, and foundry work sector, where it decreased by more than 20%. The chemical industry and textile industry also experienced a decrease in the value of new orders.
While the production increase in the automotive industry is undoubtedly positive news, the decrease in the value of new orders is cause for concern. This suggests that the industry may face challenges in terms of demand, particularly from foreign customers. It will be necessary for policymakers to monitor the situation closely and take appropriate steps to support the industry as needed.
The Czech Republic’s industrial sector is still recovering from the impact of the COVID-19 pandemic. While the automotive industry has shown strong performance, most other industrial sectors still struggle to return to pre-pandemic production.
Additionally, the decrease in the value of new orders suggests that there may be headwinds in the industry’s path to recovery. As such, policymakers will need to keep a close eye on the situation and work to provide support where needed.