Industrial production grew by 4% in September but was down 1.5% year-on-year after an average 5% contraction during the summer months, mainly driven by car production. This solid recovery might not last long due to the renewed Covid wave in the Europe. Since the beginning of the year, industry has fallen by 10.9%.
Czech industrial production fell by 0.9% month-on-month and the year-on-year decline slightly increased to -5.5%, mainly due to weaker production in the automotive sector. Since the start of the year, Czech industry has dropped by 12%
Despite facing a second wave of the Covid-19 pandemic, confidence improved in all the monitored segments in September, except for industry. Despite favourable developments this month, total confidence remains significantly below pre-Covid levels and is likely to deteriorate again next month.
Czech July industrial production increased by 6% Month-on-Month. But Year-on-Year dynamics show production 5% lower, still better than analyst expectations.
Czech inflation grinds higher as the price of tobacco, transport and alcoholic beverages rise. For the whole year, inflation is likely to be around 3%.
While the Czech unemployment rate in July increased slightly, signalling the limited impact of the Covid-19 crisis on the labour market, retails sales came in below market estimates as the recovery in sales was slower than anticipated.
Confidence improved in July driven mainly by soaring confidence in industry, which almost returned back to levels seen before the Covid outbreak. In other segments, however, confidence remains quite low and is not improving very quickly, which suggests a more gradual and slower economic recovery.
Czech inflation decelerated from 3.2% in April to 2.9% in May, but the market expected a stronger deceleration to 2.6%. Interestingly, service prices continue to grow despite Covid-19 issues.
The Czech unemployment rate increased slightly in May, but this does not mean that the labour market is immune to the economic fallout from the pandemic. This slight increase is probably the result of government measures, but once these measures end, we’re likely to see an increase in the months ahead.
Confidence in the domestic economy fell sharply in April, with the strongest month-on-month decline since records began.