Development of the industry - 2. quarter of 2007

Development of the industry in the Q2 2007 was dynamic as for all indicators. Growing was: production, employment, labour productivity as well as volumes of new orders, compared to the corresponding period of the previous year. The main factors of high industrial growth were:

• growth at new production capacities, especially of foreign investors (mainly electrical engineering industry and industry of transport equipment and production of rubber and plastic products),
• revitalization in the branch of power engineering,
• strong external demand
• growth in the manufacture of miscellaneous non-ferrous mineral products, particularly construction materials

Industrial production

Industrial growth in total and its dynamics

The year-on-year industrial production index in Q2 2007 reached 109.3% ( 110.4% in the first half of 2007), and by 109.6%, seasonally adjusted (by 110.5% in the first half-year). Compared to the y-o-y production growth in Q1 2006 (index 111.6%) the total growth of industrial production slightly dropped.





Development of individual branches and main industrial groupings

The following contributed most to the growth of industrial production: ‘ manufacture of transport equipment' (its contribution to the industrial growth in total was 2.7 percentage points, the branch grew by 13.2%), ‘manufacture of electrical and optical equipment‘ (contribution of 2.1 p.p., the branch grew by 17.0%) and ‘manufacture of machinery and equipment‘ (contribution of 1.2 p.p., growth by 18.3%). The industrial production decreased in ' basic metals and fabricated metal products‘ (contribution of -0.13 p.p., decrease by 1.0%).

In Q2 2007, industrial production increased in all leading industrial groupings: capital goods (14.6%), intermediate goods (8.9%), consumer durables (5.9%), consumer non-durables (4.3%) and power production (1.7%).


Sales

Growth and dynamics

In Q2 2007, sales in the industry were higher by 10.1% year-on-year at constant prices, ( in the first half of 2007 11.4%) and seasonally adjusted by 10.7%. At current prices the sales rose y-o-y by 12.5% (in the first half of 2007 by 13.5%).

The following contributed most to the growth of sales in industry: ‘manufacture of transport equipment (contribution to the industrial growth in total was 2.9 percentage points, the branch grew by 13.3%), ‘manufacture of electrical and optical equipment‘ (contribution of 2.2 p.p., growth by 14.5%), and ‘manufacture of machinery and equipment‘ (contribution of 1.5 p.p., growth by 18.1%). Sales in industry decreased in ‘ mining and quarrying of energy producing materials‘ (contribution -0.02 p.p., drop by 4.4%).


Changes in structure due to sales

In Q2 2007, from among individual subsections the highest share was attributed to ‘ manufacture of transport equipment‘ (19.1% in sales in industry for the branch in total), ‘manufacture of electrical and optical equipment‘ (13.5%) and ‘manufacture of basic metals and fabricated metal products‘ (13.2%). Compared to Q2 2006, no significant movements were recorded in the structure of sales in industry. Hence, the below graph shows comparison of structures in longer interval, which, in addition, documents the growing significance of car industry and ‘manufacture of electrical and optical equipment‘.



Direct export sales and sales of foreign-controlled enterprises

Direct export sales of industrial enterprises increased in Q2 2007 more than sales in industry in total by 14.8% at constant prices (by 16.5% in the first half of 2007), and by 16.6% at current prices (by 18.0% in the first half of 2007). Their share in total sales of industrial enterprises stood at 50.6% and compared to Q2 2006 it increased (from 48.8%). The biggest growth at constant prices by volume of sales was recorded in ‘manufacture of transport equipment‘ (by 20.0%), ‘manufacture of electrical and optical equipment‘ (by 12.3%), ‘manufacture of machinery and equipment‘ (by 18.5%).


Sales in industry implemented by foreign-controlled enterprises recorded a growth. They rose by 13.8% (at constant prices) and by 16.1% (at current prices). Their share in total sales at current prices stood at 60.7% while compared with Q2 2006, it grew (from 58.8%). 63.1% of sales of foreign-controlled enterprises were fed to direct exports.


Employment, wages and labour productivity

Employment

In Q2 2007, employment in industry increased, year-on year, by 24.9 thousand persons, i.e. by 2.2%. The average number of employees in industry was 1,163 thousand persons.

Employment increased most in the following industries: ‘ manufacture of rubber and plastic products‘ (+10.5%), ‘manufacture of electrical and optical equipment‘ (+6.0%) and ‘manufacture of machinery and equipment‘ (+5.6%) and employment dropped most in: ‘manufacture of textiles and textile products‘ (-7.0%), ‘mining and quarrying of energy producing materials‘ (-5.9%) and 'manufacture of leather and leather products (-5.1%)

Foreign-controlled enterprises employed 524.6 thousand persons, i.e. 45.1 % of the total number of employees in industry: Their percentage increased compared to Q2 2006 when it stood at 41.5%.

Besides the above number 40.2 thousand persons working in industrial organizations were employed by public employment offices and other companies, mostly in the following branches: ‘manufacture of transport equipment‘ (10.7 thousand persons), ‘manufacture of electrical and optical equipment‘ (9.2 thousand persons) and ‘manufacture of basic metals and fabricated metal products‘ (6 thousand persons).

Wages

In Q2 2007, average monthly wage in the industry reached CZK 21,108 and was 7.5% up, y-o-y (by 7.7% in the first half of 2007).

The highest level of wages was recorded for: ‘ manufacture of coke and refined petroleum products‘ (CZK 30,318), ‘electricity, gas and water supply‘ (CZK 27,546) and ‘mining and quarrying of energy producing materials‘ (CZK 26,579). The lowest level of wages was in: ‘manufacture of leather and leather products‘ (CZK 13,136), ‘manufacture of textiles and textile products‘ (CZK 13,938) and ‘manufacturing N.E.C.‘ (CZK 16,554). The most significant growth was recorded for ‘manufacture of basic metals and fabricated metal products‘ (by 9.7%, to CZK 20,821), ‘manufacture of coke, refined petroleum products and nuclear fuel‘ (by 9.2%), ‘manufacture of transport equipment‘ (by 8.7% to CZK 25,489).

Average wage in foreign-controlled enterprises was CZK 23,525, i.e. 11.5% more than average wage in the industry in total. It grew, year-on-year, by 6.6%.

Labour productivity

In Q2 2007, labour productivity in industry increased by 7.2%.


New orders

New orders (total)

In Q2 2007, new orders were signed in selected industries and their volume was CZK 467.6 billion, which was 5.0% up compared to Q2 2006. The growth was most contributed to by: ‘manufacture of motor vehicles‘ (contribution of 2.1 p.p., growth by 7.3%), and ‘manufacture of radio, television and communication equipment‘ (contribution of 1.2 p.p., growth by 21.4%) and ‘manufacture of chemicals and chemical products‘ (contribution of 0.9 p.p., growth by 12.9%). Drop of new orders was recorded for ‘manufacture of basic metals and fabricated metal products‘ (contribution -1.9 p.p., drop by 13.9%), ‘manufacture of other transport equipment‘ (contribution -0.2 p.p., drop by 8.4%) and 'manufacture of wearing apparel; dressing and dyeing of fur' (contribution by -0.05 p.p., drop by 14.2%).

New non-domestic orders

In Q2 2007, new non-domestic orders worth CZK 304.1 billion were signed which was 10.9% up compared to Q2 2006. Increases in the volume of new non-domestic orders were ascertained in: ‘manufacture of machinery and equipment‘ (contribution of 3.4 p.p., growth by 26.2%), ‘manufacture of motor vehicles' (contribution of 3.1 p.p., growth by 9.5%) and ‘manufacture of chemicals and chemical products‘ (contribution of 1.2 p.p., growth by 19.5%). New non-domestic orders decreased in ‘manufacture of basic metals and fabricated metal products‘ (contribution -0.6 p.p., drop by 7.1%), ‘manufacture of textiles and textile products‘ (contribution of -0.1 p.p., decrease by 4.0%) and 'manufacture of wearing apparel; dressing and dyeing of fur' (contribution by -0.05 p.p., drop by 11.4%).






The most dynamic industry: Manufacture of transport equipment

In Q2 2007, ‘ manufacture of transport equipment‘ ranked among the industries showing the most dynamic growth, which also significantly affected total results in industry (contribution to the industry in total +2.7 p.p.). The industrial production index y-o-y reached 113.2%, while the two-digit y-o-y growth has been recorded for this industry continuously since Q4 2004.





The total growth of industrial production in subsection ‘manufacture of transport equipment‘ was contributed to by division ‘manufacture of motor vehicles, trailers and semi-trailers‘ (contribution to the growth of subsection of 12.5 p.p., growth by 13.0%) and division ‘manufacture of other transport equipment‘ (contribution of 0.7 p.p., growth by 17.7%).

The growth of production responded to the sales growth, which was, year-on-year, 13.3% at constant prices and 12.9% at current prices.

Direct export sales in subsection ‘manufacture of transport equipment‘ increased compared to Q2 2006 by 20.0% at constant prices and by 19.9% at current prices. Their share in total direct export sales (at current prices) stood at 28.0%.

In Q2 2007, employment in subsection ‘manufacture of electrical and optical equipment‘ increased, year-on-year, by 5,611 persons, i.e. by 4.4%. Average monthly wage reached, in Q2 2007, CZK 25,489 and was year-on-year, 8.7% up.

In Q2 2007, in subsection ‘manufacture of transport equipment‘ new orders worth CZK 145.0 billion were signed. The year-on-year growth was recorded especially for division ‘manufacture of motor vehicles, trailers and semi-trailers‘ (by 7.3%). In division ‘manufacture of other transport equipment‘ 8.4% drop was recorded.

In Q2 2007, in subsection ‘manufacture of transport equipment‘ new non-domestic orders worth CZK 103.0 billion were signed. A 9.5% growth was recorded especially for division ‘manufacture of motor vehicles, trailers and semi-trailers‘ and in ‘manufacture of other transport equipment‘ the growth was 25.6%).