Czech industrial output up 8.7% y/y in August.

Komentář
Investiční bankovnictví KB

      The industrial output growth in August was well below market as well as our expectations. The trend of acceleration from the previous months was interrupted. However, despite a lower headline figure, the structure confirmed high growth dynamics of the Czech industry. The lower output dynamics could be explained by lower sales figures in the previous two months and by higher inventories. Nevertheless, the sales rose above output in August. Most traditional dynamic branches – manufacturing of machinery and manufacturing of electrical and optical equipment decelerated. However, the strong trend should not be threatened, as new orders show (new order in the manufacturing of motor vehicles, trailers, and semi-trailers went up 16,4%). The one-off failure could be explained by August’s vacations.

      

       The domestic industry is driven mainly by exports. The export growth has been oscillating around 30% y/y for the last 5 months. Direct export sales by industrial enterprises rose by an above average 11.5% y/y, industrial foreign-controlled companies raised their sales by 12.3% y/y. High growth dynamics has begun to positively influence the Czech market. In manufacturing the falling employment came to an end for the first time in 34 months.

      

       Announced data confirmed the strength of external demand which is not threatened by the current level of the exchange rate. The data brings no significantly new information about the timing of the next interest rate hike. We suppose that the updated CNB macroeconomic and inflation prognosis will be moved to slightly higher growth rates; and will be consistent with growing interest rates. However, mainly thanks to dovish comments in recent days, we expect a 25bp interest rate rise at the November meeting of the central bank governing boards. We expect key repo rate at 2.75% at the end of the year.

      Tyto zprávy pro vás vytváří Investiční bankovnictví KB.