In a promising turn of events, the Czech industrial sector has finally rebounded after five months of continuous decline. The Czech Statistical Office (ČSÚ) reported on Monday that industrial production saw a 1.5% year-on-year increase in August, with an even more impressive 1.8% month-on-month growth.
This upturn isn’t limited to production alone. The number of new orders has also seen a significant boost, painting a more optimistic picture for the Czech economy. However, experts caution against excessive optimism, pointing out the volatility of summer months’ data.
Radek Matějka, Director of Agriculture, Forestry, Industry, Construction, and Energy Statistics at ČSÚ, noted that despite August’s growth, July saw a nearly 2% decline. When considering both months together, production has essentially stagnated year-on-year. The fluctuation is largely attributed to the timing of company-wide holidays in the automotive industry, as Petr Dufek, Chief Economist at Banka Creditas, pointed out.
August saw the most significant growth in the production of motor vehicles, computers, and electronic and optical devices. However, the long-term downward trend continued in machinery and equipment manufacturing, as well as coal mining. A key statistic in August’s industrial figures is the rise in new orders, with their value increasing by more than 10% year-on-year. Foreign orders, in particular, saw a substantial increase of over 13%.
Despite these positive indicators, some analysts remain cautious. Tomáš Volf, an analyst at Citfin, points out that in the last 14 months, domestic industrial production has only shown growth three times, with August being one of those instances. He emphasizes that without increased consumer spending in Germany, the Czech industry is unlikely to gain significant momentum.