Development of the industry - 2. quarter of 2006

           
Development of the industry in the Q2 2006 was highly dynamic as for all indicators (growing were: production, employment, labour productivity as well as volumes of new orders). The main factors of high industrial growth were:
-          growth at new production capacities, especially of foreign investors (industry of transport equipment and electrical engineering industry);
-          revitalization in the branch of manufacture of machinery and equipment and manufacture of basic metals and fabricated metal products.
 
In Q2 2006, there were 3 working days less in comparison to the Q2 2005.
 
 
Production
 
The year-on-year industrial production index reached 108.9% in the Q2 2006 (110.8% working days adjusted). The following contributed most to the growth of industrial production: ‘manufacture of transport equipment’ (its contribution to the industrial growth in total was +3.5 percentage points; the branch grew by +18.3%); ‘manufacture of basic metals and fabricated metal products’ (contribution +1.9 p.p.; growth by +14.3%), and ‘manufacture of electrical and optical equipment’ (contribution of +1.7 p.p.; growth by +14.7%). On the contrary, industrial production decreased in: ‘mining and quarrying of energy producing materials’ (contribution –0.2 p.p.; decrease by –9.8%); ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution –0.2 p.p.; drop by –3.0%), and ‘electricity, gas and water supply’ (contribution –0.04 p.p.; fall by –0.7%).
 
In Q2 2006, industrial production increased in the following main industrial groupings: consumer durables (+30.6%), capital goods (+15.4%), intermediate goods (+7.9%), and energy (+0.6%). It decreased in the main industrial grouping: consumer non-durables (-0.1%).
 
 
Sales
 
In Q2 2006, sales in industry were higher by +9.2% year-on-year (constant prices); after working days adjustment it was +11.6%. The following contributed most to the growth of sales in industry: ‘manufacture of transport equipment’ (its contribution to the industrial growth in total was 3.6 percentage points; the branch grew by +18.3%); ‘manufacture of electrical and optical equipment’ (contribution of +2.0 p.p.; growth by +14.0%), and ‘manufacture of basic metals and fabricated metal products’ (contribution of +1.5 p.p.; growth by +13.6%). Sales in industry decreased in: ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution –0.2 p.p.; drop by –3.2%), ‘manufacture of coke, refined petroleum products’ (contribution –0.1 p.p., decrease by –4.5%), and ‘manufacture of pulp, paper and paper products; publishing and printing‘ (contribution –0.03 p.p., drop by –0.8%).
 
               
Direct exports
           
Direct export sales of industrial enterprises increased by +8.8% at constant prices (+6.0% at current prices), and their share in total sales of industrial enterprises stood at 48.8%. The biggest constant price growth occurred in ‘mining and quarrying of energy producing materials’ (+93.8%), ‘manufacture of machinery and equipment’ (+18.6%), and ‘manufacture of basic metals and fabricated metal products’ (+15.8%). The biggest decreases were recorded for ‘manufacture of chemicals, chemical products and man-made fibres’ (-4.8%), and ‘manufacture of pulp, paper and paper products; publishing and printing’ (-1.5%).
 
Direct export sales index was influenced by changes in organization of trade. These changes in the Q2 2006 caused especially the increase of the index in ‘mining and quarrying of energy producing materials’, in which there was a shift from the indirect export to direct. After elimination of those changes, the year-on-year sales index can be estimated at 115.1% at constant prices (106.2% at current prices).
 

Foreign-controlled enterprises
 
Sales in industry implemented by foreign-controlled enterprises grew by +16.1% at constant prices (+14.7% at current prices), and their share in total sales at current prices stood at 58.7%.
 
In Q2 2006, there were 1,963 foreign-controlled enterprises operating in the industry; they employed more than 472 thousand employees with the average monthly nominal wage of CZK 21,838 (i.e. by 11.2% more than the average monthly nominal wage for the industry in total). 
 

Employment
 
In Q2 2006, employment in the industry increased by 18.4 thousand persons, i.e. by +1.6%. It increased most in the following industries: ‘manufacture of rubber and plastic products’ (+8.9%), ‘manufacture of transport equipment’ (+5.6%), and ‘manufacture of electrical and optical equipment’ (+5.5%). Employment dropped most in: ‘manufacture of textiles and textile products’ (-8.5%), ‘electricity, gas and water supply’ (-5.3%), and ‘manufacture of chemicals, chemical products and man-made fibres’ (-3.1%). The average registered number of employees in industry was 1,142.5 thousand persons. Besides that number, other 32.2 thousand working in industrial organizations were employed by public employment offices and other companies, mostly in the following branches: ‘manufacture of transport equipment’ (8.5 thousand persons), ‘manufacture of electrical and optical equipment’ (7.3 thousand persons), and ‘manufacture of basic metals and fabricated metal products’ (5.6 thousand persons).     
 

Wages
 
In Q2 2006, average monthly nominal wage in the industry reached CZK 19,425 and was +6.3% up year-on-year. The highest level of wages (the average monthly nominal wage per employee) was recorded for: ‘manufacture of coke and refined petroleum products’, ‘electricity, gas and water supply’, and ‘mining and quarrying of energy producing materials’. The lowest level of wages was in: ‘manufacture of leather and leather products’, ‘manufacture of textiles and textile products’, and ‘manufacturing, n.e.c.’
 

Labour productivity
 
In Q2 2006, labour productivity in the industry went up by +7.4%, growing faster than the average monthly nominal wage. The highest labour productivity increase was reported for ‘manufacture of leather and leather products‘ (+14.2%), ‘manufacture of transport equipment’ (+12.0%), and ‘manufacture of machinery and equipment’ (+11.4%). Unit wage costs dropped by –1.0%.  
 
 
New orders (selected industries)

In Q2 2006, new orders worth CZK 440.8 billion were signed and their volume was +18.8% up on the Q2 2005. The growth was ascertained in: ‘manufacture of machinery and equipment’ (+47.3%), ‘manufacture of radio, television and communication equipment’ (+29.2%), and ‘manufacture of basic metals and fabricated metal products’ (+21.3%). The decrease was recorded for: ‘manufacture of medical, precision and optical instruments, watches and clocks’ (–14.9%), ‘manufacture of wearing apparel; dressing and dyeing of fur’ (-11.8%), and ‘manufacture of pulp, paper and paper products’ (-7.2%).
 
In Q2 2006, new non-domestic orders worth CZK 271.0 billion were signed and their volume was +11.3% up on the Q2 2005.  Increases in the volume of new non-domestic orders were ascertained in: ‘manufacture of radio, television and communication equipment’ (+26.4%), ‘manufacture of basic metals and fabricated metal products’ (+26.4%), and ‘manufacture of electric machinery and apparatus‘ (+24.7%). New non-domestic orders decreased in: ‘manufacture of pulp, paper and paper products’ (-16.8%),  ‘manufacture of other transport equipment’ (-16.7%), and ‘manufacture of wearing apparel; dressing and dyeing of fur’ (-13.1%).
 

Development of industry in the EU

		Change, %
		March 2006	April 2006	May 2006
Industrial production index  (corresponding period of previous  year =100)	Eurozone   EU 25   CR	4.2   4.2   15.4	1.7   1.8   7.9	4.9   4.7   13.8
Index of orders (current prices) (corresponding period of previous  year =100)	Eurozone   EU 25   CR	13.7   12.3   28.0	3.9   3.8   15.4	14.2   13.0   30.9
Industrial production index (SA) (previous month =100)	Eurozone   EU 25   CR	0.8   0.6   2.5	-0.7   -0.2   -2.2	1.6   1.2   3.9
Index of orders  (SA) (previous month =100)	Eurozone   EU 25   CR	-1.3   -1.1   4.1	-0.8   0.0   4.3	2.3   1.5   4.0

 
Source:   News release - 17 July 2006; Industrial production - Eurostat
               News release - 24 July 2006; Industrial new orders - Eurostat
               http://ec.europa.eu/eurostat/