Development of the industry - 3. quarter of 2008

Development of industry in Q3 2008 showed the growth of production, sales, wages and labour productivity indicators. Decreasing was the number of persons employed and the number of orders. Compared with the Q2 2008 the growth rate decreased for all indicators except of labour productivity.
The main factor of industrial growth remained the growth at new production capacities, especially of foreign investors (mainly electrical engineering industry and industry of transport equipment).
In Q3 2008 there were 4 working days more than in Q3 2007.


Industrial production

Industrial growth in total and its dynamics

The year-on-year industrial production index in Q3 2008 reached 104.7%, and 101.9%, working days adjusted and 102.7%, seasonally adjusted. Compared to the y-o-y production growth in Q2 2008 the dynamics of industrial production growth slightly decreased.

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 2.4 percentage points, the branch grew by 16.2%), 'manufacture of transport equipment' (contribution 1.1 p.p., growth by 5.3%) and 'manufacture of coke, refined petroleum products and nuclear fuel‘ (contribution 0.8 p.p., growth by 23.2%). Results reached in 'manufacture of coke, refined petroleum products and nuclear fuel‘ came from extraordinarily low comparable basis in the previous year (outage of production equipment).
In contrast, the industrial production dropped in 'food, beverages and tobacco' (contribution –0.5 p.p., drop by 5.4%), 'electricity, gas and water supply'' (contribution –0.3 p.p., drop by 4.6%) and in 'manufacture of wood, wood products except furniture' (contribution –0.2 p.p., drop by 12.6%).

In Q3 2008, the industrial production increased in all leading industrial groupings: consumer durables (26.2%), intermediate goods (5.2%), capital goods (4.8%), and power production (4.6%). The drop of production was recorded in the main industrial grouping for consumer non-durables (by 4.2%).


Sales

Growth and dynamics

Sales in industry at constant prices grew in Q3 2008 by 4.5%, year-on-year, working days adjusted by 1.7% and by 2.5%, seasonally adjusted. At current prices, sales grew by 2.6%, 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 2.3 percentage points, the branch grew by 14.0%), 'manufacture of transport equipment' (contribution 1.1 p.p., growth by 5.3%) and 'manufacture of chemicals, chemical products and man-made fibres' (contribution 0.6 p.p., growth by 14.2%). Sales in industry decreased in 'food, beverages and tobacco' (contribution –0.4 p.p., decrease by 5.6%), 'manufacture of wood, wood products except of furniture' (contribution –0.2 p.p., decrease by 13.0%) and 'manufacture of textiles and textile products' (contribution –0.2 p.p., decrease by 8.2%).Direct export sales and sales of foreign-controlled enterprises

Direct export sales of industrial enterprises grew in Q3 2008 by 8.1% at constant prices and dropped by 2.2% at current prices. Their contribution to total sales of industrial enterprises made 46.6% and compared to Q3 2007 it fell slightly (from 48.8%). The biggest growth at constant prices by volume of sales was recorded in 'manufacture of transport equipment' (by 8.4%), 'manufacture of electrical and optical equipment' (by 17.3%) and 'manufacture of machinery and equipment' (by 9.8%).

Sales in industry implemented by foreign-controlled enterprises recorded a growth, too. They rose by 5.2% (by 0.9% at current prices). Their share in total sales at current prices made 58.2% while compared with Q3 2007 it decreased slightly (from 59.2%). 60.3% of sales of foreign-controlled enterprises was fed to direct exports.


Employment, wages and labour productivity

Employment

In Q3 2008, employment in industry decreased, year-on-year, by 2.7 thousand persons, i.e. by 0.2%. The average number of employees in industry was 1 182 thousand persons.

Employment decreased most in the following industries: 'manufacture of textiles and textile products' (by 12.8%), 'manufacture of leather and leather products' and 'electricity, gas and water supply' (both by 6.8%). The most market increase of employment was recorded in: 'manufacture of transport equipment' (by 4.3%), 'manufacture of electrical and optical equipment' and 'manufacture of rubber and plastic products' (both by 3.2%).

Foreign-controlled enterprises employed 548.7 thousand persons, i.e. 46.4 % of the total number of employees in industry. Their share moderately increased compared with Q3 2007 when it stood at 44.9%.

Besides the above number 43.7 thousand persons working in industrial organizations were employed by public employment offices and other companies, (y-o-y drop by 1.8%) mostly in the following branches: 'manufacture of electrical and optical equipment' (10.6 thousand persons, drop by 0.3%), 'manufacture of transport equipment' (10.3 thousand persons, drop by 7.3%) and 'manufacture of basic metals and fabricated metal products' (7.2 thousand persons, growth by 17.3%).

Wages

In Q3 2008, average monthly wage in industry reached CZK 22 138 and was 7.4% up, y-o-y.The highest level of wages was recorded for: 'manufacture of coke and refined petroleum products' (CZK 30 898), 'electricity, gas and water supply' (CZK 29 635) and 'mining and quarrying of energy producing materials' (CZK 27 832). The lowest wage level was in: 'manufacture of leather and leather products' (CZK 13 906), 'manufacture of textiles and textile products' (CZK 15 135) and manufacturing n.e.c (CZK 17 857). The biggest growth was recorded in 'mining and quarrying of energy producing materials' (by 16.5%), 'electricity, gas and water supply' (by 12.3%) and 'manufacture of coke and refined petroleum products' (by 12.1%).

Average wage in foreign-controlled enterprises was CZK 23 956, i.e. by 8.2% more than average wage in the industry in total. It grew, year-on-year, by 5.9%.

Labour productivity

In Q3 2008, labour productivity in industry grew by 4.8%, y-o-y.


New orders

New orders (total)

In Q3 2008, new orders were signed in selected industries and their volume decreased by 4.1%, year-on-year. The drop was recorded in 'manufacture of motor vehicles, trailers and semi-trailers' (contribution –2.7 p.p., drop by 9.9%), 'manufacture machinery and equipment' (contribution –2.6 p.p., drop by 16.7%) and in 'manufacture of electrical machinery and apparatus' (contribution –2.1 p.p., drop by 19.1%). The growth of new orders was sustained in: 'manufacture of radio, television and communication equipment and apparatus' (contribution 2.9 p.p., growth by 59.4%), 'manufacture of chemicals, chemical products and man-made fibres' (contribution by 1.1 p.p., growth by 16.6%) and 'manufacture of basic metals and fabricated metal products' (contribution 0.6 p.p., growth by 4.8%).

Non-domestic new orders

In Q3 2008, non-domestic new orders signed in selected industries dropped by 5.9%, y-o-y. Decrease in the number of non-domestic new orders was recorded in: 'manufacture of motor vehicles, trailers and semi-trailers' (contribution –3.7 p.p., drop by 12.2%), 'manufacture of machinery and equipment' (contribution –2.5 p.p., drop by 14.9%) and 'manufacture of electrical machinery and apparatus' (contribution –2.1 p.p., drop by 19.0%). Increases in the number of non-domestic new orders was ascertained in: 'manufacture of radio, television and communication equipment and apparatus' (contribution 4.3 p.p., growth by 73.4%) and 'manufacture of basic metals and fabricated metal products' (contribution 0.5 p.p., growth by 5.9%) and 'manufacture of chemicals, chemical products and man-made fibres' (contribution by 0.3 p.p., growth by 4.4%).


Dynamic growth in manufacture of transport equipment

One of three branches showing the most dynamic growth in Q3 2008 and also for the first three quarters of 2008 was 'manufacture of transport equipment' (contribution to the growth in total 1.1 p.p.). The y-o-y industrial production index reached 105.3% in Q3, however, compared with the growth rate in the previous quarter the dynamics slowed down.

The total growth of industrial production in the subsection 'manufacture of transport equipment' was contributed to by the division 'manufacture of motor vehicles, trailers and semi-trailers' (contribution to the growth in subsection 4.3 p.p., growth by 5.2%) and the division 'other transport equipment' (contribution to the growth in subsection 0.3 p.p., growth by 7.8%).

The growth of production responds to the development of sales, which for the whole subsection increased by 5.3%, y-o-y, at constant prices while at current prices they dropped by 6.3%. Direct export sales increased compared with Q3 2007 by 8.4% (-5.2% at current prices). The share of direct export sales in manufacture of transport equipment in total direct export sales made 25.1% at current prices.

Employment in the subsection 'manufacture of transport equipment' increased in Q3 2008 by 5 979 persons, i.e. by 4.3%, y-o-y. The average monthly wage in Q3 2008 reached CZK 24 448, i.e. by 4.9% more in the year-on-year comparison.

In Q3 2008 in the subsection 'manufacture of transport equipment' new orders in the amount of CZK 119.6 billion were signed of which non-domestic new orders made CZK 84.4 billion. The y-o-y growth of new orders in total was recorded in 'manufacture of other transport vehicles' (19.5%), in 'manufacture of motor vehicles trailers and semi-trailers' a drop by 9.9% was recorded. In non- domestic new orders the trends are similar – the growth was reported for 'manufacture of other transport equipment' (14.2%), in 'manufacture of motor vehicles trailers and semi-trailers' the orders dropped by 12.2%.