Development of the industry - 2. quarter of 2008

Development of industry in Q2 2008 showed the growth as for most of indicators excluding new orders. Growing were: production, sales, employment and labour productivity, compared to the corresponding period of the previous year. Compared with the Q1 2008 the growth rate of sales and labour productivity was slightly bigger, a drop was registered in the number of the employed, wages and orders, the growth rate of production showed no changes. The main factor of high industrial growth remained growth at new production capacities, especially of foreign investors (mainly electrical engineering industry and industry of transport equipment and manufacture of basic metals and fabricated metal products).


Industrial production

Industrial growth in total and its dynamics

The year-on-year industrial production index in Q2 2008 reached 105.8%, and 105.1%, working days adjusted and 105.3%, seasonally adjusted. Compared to the y-o-y production growth in Q1 2008 the dynamics of industrial production growth remained unchanged.

Development of individual branches and main industrial groupings

The following contributed most to the growth of industrial production: 'manufacture of electrical and optical equipment' (its contribution to the industrial growth in total was 2.8 percentage points, the branch grew by 21.2%), 'manufacture of transport equipment' (contribution 1.7 p.p., growth by 7.8%) and 'manufacture of basic metals and fabricated metal products‘ (contribution 0.7 p.p., growth by 6.0%). In contrast, industrial production decreased in 'manufacture of food products, beverages and tobacco' (contribution –0.6 p.p., decrease by 7.0%), 'manufacture of textiles and textile products' (contribution –0.2 p.p., decrease by 7.3%) and 'manufacture of other non-metal mineral products' (contribution –0.1 p.p., decrease by 3.1%).

In Q2 2008, the industrial production increased in all leading industrial groupings : 'consumer durables' (+36.7%), 'capital goods' (+8.2%), 'intermediate goods' (+5.7%). The drop of production was recorded in the main industrial groupings: 'consumer non-durables' (-5.1%) and 'energy' (-0.1%).


Sales

Growth and dynamics

Sales in industry at constant prices grew in Q2 2008 by 6.0%, year-on-year, working days adjusted by 5.3% and by 5.6%, seasonally adjusted. At current prices, sales grew by 4.2%, year-on-year.

The following contributed most to the growth of sales in industry: 'manufacture of electrical and optical equipment' (contribution to the industrial growth in total was 2.8 percentage points, the branch grew by 18.1%), 'manufacture of transport equipment' (contribution 1.8 p.p., growth by 7.8%) and 'manufacture of machinery and equipment' (contribution 0.9 p.p., growth by 9.9%). Sales in industry decreased in ''manufacture of food products, beverages and tobacco' (contribution –0.6 p.p., decrease by 7.4%), 'manufacture of textiles and textile products' (contribution –0.2 p.p., decrease by 7.8%) and 'manufacture of other non-metal mineral products' (contribution –0,1 p.p., decrease by 3.0%).

Direct export sales and sales of foreign-controlled enterprises

Direct export sales of industrial enterprises grew in Q2 2008 faster than sales in industry in total - by 8.7% at constant prices and by 0.2% at current prices. Their contribution to total sales of industrial enterprises made 48.2% and compared to Q2 2007 it dropped slightly (from 50.2%). The biggest growth at constant prices by volume of sales was recorded in 'manufacture of transport equipment' (by 7.2%), 'manufacture of electrical and optical equipment' (by 16.4%) and 'manufacture of machinery and equipment' (by 15.2%).

Sales in industry implemented by foreign-controlled enterprises recorded a growth, too. They rose by 7.0% (by 2.9% at current prices). Their share in total sales at current prices made 59.4% while compared with Q2 2007 it decreased slightly (from 60.1%). 62.1% of sales of foreign-controlled enterprises was fed to direct exports.


Employment, wages and labour productivity

Employment

In Q2 2008, employment in industry increased, year-on-year, by 21.8 thousand persons, i.e. by 1.9%. The average number of employees in industry was 1 188 thousand persons.

Employment increased most in the following industries: 'manufacture of electrical and optical equipment' (by 6.3%), 'manufacture of rubber and plastic products' (by 5.8%) and 'manufacture of transport equipment' (by 4.9%) and employment dropped most in: 'manufacture of textiles and textile products' (by 6.8%), 'manufacture of coke and refined petroleum products' (by 6.6%) and 'manufacture of leather and leather products' (by 5.7%).

Foreign-controlled enterprises employed 544.1 thousand persons, i.e. 45.8 % of the total number of employees in industry. Their share moderately increased compared with Q2 2007 when it stood at 45.1%.

Besides the above number 46.2 thousand persons working in industrial organizations were employed by public employment offices and other companies, (y-o-y growth by 14.3%) mostly in the following branches: 'manufacture of electrical and optical equipment' (11.1 thousand persons, growth by 24.6%), 'manufacture of transport equipment' (11.1 thousand persons, growth by 1.5%) and 'manufacture of basic metals and fabricated metal products' (7.3 thousand persons, growth by 21.3%).

Wages

In Q2 2008, average monthly wage in industry reached CZK 22 903 and was 8.5% up, y-o-y. The highest level of wages was recorded for: 'manufacture of coke and refined petroleum products' (CZK 37 121), 'electricity, gas and water supply' (CZK 30 416) and 'mining and quarrying of energy producing materials' (CZK 30 068). The lowest wage level was in: 'manufacture of leather and leather products' (CZK 13 699), 'manufacture of textiles and textile products' (CZK 14 668) and manufacturing n.e.c (CZK 17 889). The biggest growth was recorded in 'manufacture of coke and refined petroleum products' (by 22.5%), 'mining and quarrying of energy producing materials' (by 13.1%) and 'electricity, gas and water supply' (by 11.0%).

Average wage in foreign-controlled enterprises was CZK 25 312, i.e. by 10.5% more than average wage in the industry in total. It grew, year-on-year, by 7.2%.

Labour productivity

In Q2 2008, labour productivity in industry grew by 3.7%, y-o-y.


New orders

New orders (total)

In Q2 2008, new orders were signed in selected industries and their volume decreased by 0.6%, year-on-year. The drop was recorded in 'manufacture of motor vehicles, trailers and semi-trailers' (contribution –3.3 p.p., drop by 11.1%), 'manufacture of office machinery and computers' (contribution –0.6 p.p., drop by 9.4%) and in 'manufacture of textiles and textile products' (contribution –0.3 p.p., drop by 12.6%). The growth of new orders was most contributed to 'manufacture of radio, television and communication equipment and apparatus' (contribution 0.5 p.p., growth by 8.9%), 'manufacture of other transport equipment' (contribution by 0.6 p.p., growth by 32.3%) and 'manufacture of basic metals and fabricated metal products' (contribution 1.4 p.p., growth by 12.9%).

Non-domestic new orders

In Q2 2008, non-domestic new orders signed in selected industries dropped by 3.7%, y-o-y. Decrease in the number of non-domestic new orders was recorded in: 'manufacture of motor vehicles, trailers and semi-trailers' (contribution –4.5 p.p., drop by 13.3%), 'manufacture of office machinery and computers' (contribution –1.6 p.p., drop by 37.2%) and 'manufacture of chemicals, chemical products and man-made fibres' (contribution -0.6 p.p., drop by 8.5%). Increases in the number of non-domestic new orders was ascertained in: ''manufacture of other transport equipment' (contribution by 0.6 p.p., growth by 36.6%), 'manufacture of radio, television and communication equipment and apparatus' (contribution 0.6 p.p., growth by 8.6%) and 'manufacture of basic metals and fabricated metal products' (contribution 2.0 p.p., growth by 30.0%).


The biggest growth was recorded in manufacture of basic metals and fabricated metal products
In Q2 2008, 'manufacture of basic metals and fabricated metal products' ranked among three industries showing the most dynamic growth. The y-o-y industrial production index reached 106.0%, working days adjusted 105.2% and seasonally adjusted 105.4%.

The total growth of industrial production in the subsection 'manufacture of basic metals and fabricated metal products' was contributed to by the division 'manufacture of basic metals' (contribution to the growth in subsection 4.7 p.p., growth by 8.5%) and the division 'manufacture of fabricated metal products' (contribution to the growth in subsection 1.3 p.p., growth by 2.8%).

The growth of production responds to the development of sales, which increased by 5.3% y-o-y at constant prices and by 6.1% at current prices. Direct imports sales in the subsection 'manufacture of basic metals and fabricated metal products' increased compared with Q2 2007 by 6.0% at constant prices and by 5.3% at current prices. Their share in total direct export sales made 13.2% at current prices.

Employment in the subsection 'manufacture of basic metals and fabricated metal products' increased in Q2 2008, by 7 789 persons, i.e. by 4.7%, y-o-y. The average monthly wage in Q2 2008 reached CZK 22 299, i.e. by 7.1% more in the year-on-year comparison.

In Q2 2008 in the subsection 'manufacture of basic metals and fabricated metal products' new orders in the amount of CZK 98.0 billion were signed . The volume of new orders increased y-o-y in the division 'manufacture of basic metals' (by 12.9%) and in 'manufacture of fabricated metal products' by 6.6%. In Q2 2008 in the subsection 'manufacture of basic metals and fabricated metal products' new non-domestic orders were singed in the amount of CZK 52.8 billion. The growth was recorded in the division 'manufacture of basic metals' (by 30.0%) and in the division 'manufacture of fabricated metal products' (by 5.9%).