Development of the industry - 3. quarter of 2006

The industry in the Q3 2006 sustained rapid growth as for most of the indicators (growing were: production, employment, wages in relation to the labour productivity growth as well as volumes of new orders).

The main factors of high industrial growth were:
- production growth at new production and assembling capacities, especially in industry of transport equipment and related branches;
- production growth in manufacture of machinery and equipment, especially for power industry;
- continuing revitalization in the branch of manufacture of basic metals and fabricated metal products.
The above-mentioned growth factors resulted also from a marked external demand for products of the above-mentioned branches.

In Q3 2006, there was 1 working day less in comparison to the Q3 2005.


Production

The year-on-year industrial production index reached 108.3% in the Q3 2006 (108.9% 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 +2.7 percentage points; the branch grew by +15.5%), ‘manufacture of electrical and optical equipment’ (contribution of +1.9 p.p.; growth by +14.6%), and ‘manufacture of basic metals and fabricated metal products’ (contribution +1.5 p.p.; growth by +10.8%). On the contrary, industrial production decreased in: ‘manufacture of food products, beverages and tobacco‘ (contribution of -0.3 p.p.; decrease by –3.3%), ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution –0.1 p.p.; drop by –1.2%), and ‘manufacture of pulp, paper and paper products; publishing and printing‘ (contribution –0.1 p.p.; decrease by –1.8%).

In Q3 2006, industrial production increased in the following main industrial groupings: consumer durables (+17.7%), capital goods (+14.3%), intermediate goods (+7.9%), and energy (+5.1%). It decreased in the main industrial grouping: consumer non-durables (-2.8%).


Sales

In Q3 2006, sales in industry were higher by +8.3% year-on-year (constant prices); after working days adjustment it was +9.2%. The following contributed most to the growth of sales in industry: ‘manufacture of transport equipment’ (its contribution to the industrial growth in total was 2.9 percentage points; the branch grew by +15.5%), ‘manufacture of electrical and optical equipment’ (contribution of +2.0 p.p.; growth by +13.7%), and ‘manufacture of basic metals and fabricated metal products’ (contribution of +1.2 p.p.; growth by +10.1%). Sales in industry decreased in: ‘manufacture of food products, beverages and tobacco‘ (contribution –0.3 p.p.; drop by –2.9%), ‘manufacture of pulp, paper and paper products; publishing and printing‘ (contribution –0.1 p.p., drop by –2.2%), and ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution –0.1 p.p.; drop by –1.3%).


Direct exports

Direct export sales of industrial enterprises increased by +10.2% at constant prices (+9.7% at current prices), and their share in total sales of industrial enterprises stood at 48.5%. The biggest constant price growth occurred in ‘mining and quarrying of energy producing materials’ (+269.1%), ‘manufacture of machinery and equipment’ (+15.7%), and ‘manufacture of rubber and plastic products‘ (+15.2%). The biggest decreases were recorded for ‘manufacture of chemicals, chemical products and man-made fibres’ (-4.6%), ‘manufacture of pulp, paper and paper products; publishing and printing’ (-4.2%), and ‘manufacture of textiles and textile products‘ (-0.6%).

Direct export sales index was influenced by changes in organization of trade. These changes in the Q3 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 138.9% at constant prices (126.5% at current prices).


Foreign-controlled enterprises

Sales in industry implemented by foreign-controlled enterprises grew by +15.5% at constant prices (+16.1% at current prices), and their share in total sales at current prices stood at 58.4%.

In Q3 2006, there were 1,959 foreign-controlled enterprises operating in the industry; they employed more than 479 thousand employees with the average monthly nominal wage of CZK 21,070 (i.e. by 10.7% more than the average monthly nominal wage for the industry in total).


Employment

In Q3 2006, employment in the industry increased by 15.0 thousand persons, i.e. by +1.3%. It increased most in the following industries: ‘manufacture of rubber and plastic products’ (+9.1%), ‘manufacture of basic metals and fabricated metal products‘ (+6.5%), and ‘manufacture of electrical and optical equipment’ (+6.5%). Employment dropped most in: ‘manufacture of textiles and textile products’ (-8.7%), ‘electricity, gas and water supply’ (-6.2%), and ‘mining and quarrying of energy producing materials‘ (-4.8%). The average registered number of employees in industry was 1,145.4 thousand persons. Besides that number, other 35.4 thousand working in industrial organizations were employed by public employment offices and other companies, mostly in the following branches: ‘manufacture of electrical and optical equipment’ (9.3 thousand persons), ‘manufacture of transport equipment’ (9.0 thousand persons), and ‘manufacture of basic metals and fabricated metal products’ (5.5 thousand persons).


Wages

In Q3 2006, average monthly nominal wage in the industry reached CZK 19,029 and was +5.2% 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 Q3 2006, labour productivity in the industry went up by +6.9%, growing faster than the average monthly nominal wage. The highest labour productivity increase was reported for ‘mining and quarrying of energy producing materials‘ (+20.7%), ‘manufacture of transport equipment’ (+12.1%), and ‘manufacture of machinery and equipment’ (+11.7%). Unit wage costs dropped by –1.6%.


New orders (selected industries)

In Q3 2006, new orders worth CZK 394.2 billion were signed and their volume was +14.4% up on the Q3 2005. The growth was most contributed to by: ‘manufacture of motor vehicles, trailers and semi-trailers‘ (its contribution to the growth was +5.6 percentage points; the branch grew by +22.5%), ‘manufacture of machinery and equipment’ (contribution of +2.3 p.p.; growth by +18.7%), and ‘manufacture of fabricated metal products except machinery and equipment‘ (contribution of +1.6 p.p.; growth by +19.7%). The decrease was recorded for: ‘manufacture of wearing apparel; dressing and dyeing of fur’ (contribution of -0.1 p.p.; decrease by –10.2%), and ‘manufacture of pulp, paper and paper products’ (contribution of -0.1 p.p.; decrease by –1.4%).

In Q3 2006, new non-domestic orders worth CZK 248.4 billion were signed and their volume was +13.8% up on the Q3 2005. Increases in the volume of new non-domestic orders were most contributed to by: ‘manufacture of motor vehicles, trailers and semi-trailers‘ (its contribution to the growth was +5.5 percentage points; the branch grew by +19.2%), ‘manufacture of machinery and equipment’ (contribution of +2.6 p.p.; growth by +19.8%), and ‘manufacture of fabricated metal products except machinery and equipment‘ (contribution of +1.4 p.p.; growth by +15.9%). New non-domestic orders decreased in: ‘manufacture of pulp, paper and paper products’ (contribution of -0.2 p.p.; decrease by –7.2%), and ‘manufacture of wearing apparel; dressing and dyeing of fur’ (contribution of -0.1 p.p.; decrease by –8.4%).


Development of industry in the EU

		Change, %
		June 2006	July 2006	August 2006
Industrial production index  (corresponding period of previous  year =100)	Eurozóna   EU 25   CR	4.4    4.1    10.6	3.0    3.1    11.2	5.4    5.0    7.5
Index of orders (current prices) (corresponding period of previous  year =100)	Eurozóna   EU 25   CR	5.7    7.7    11.8	9.8    9.7    20.7	14.3    12.4   13,5
Industrial production index (SA) (previous month =100)	Eurozóna   EU 25   CR	0.0    0.1    -0.2	-0.4    -0.2    0.9	1.8    1.3    -1.3
Index of orders  (SA) (previous month =100)	Eurozóna   EU 25   CR	-2.0    -0.3    -6.0	1.9    1.1    1.7	3.7    2.6    -2.0

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