Development of the industry - 4. quarter of 2005

In 2005, the industrial production growth continued (as measured by the industrial production index 105.7%), while the growth rate was slower than in 2004 (109.5%).

Factors decisive for development of industry in 2005:
- entry of other foreign investors;
- start of new production capacities mainly in automotive industry;
- marked growth of export of industrial enterprises;
- stable supplies of fuels and energy for the existing and new production capacities;
- overall employment stability in industry accompanied by a moderate wage increase;
- significant growth of labour productivity especially at new capacities;
- continuous coverage of industrial production by orders.

Factors having a negative influence on the industrial production growth were: increase of prices of raw materials for manufacturing (especially petroleum) and competitive import of cheap consumer goods (textile in particular).


Production

The year-on-year industrial production index reached 105.7% in 2005 (it was 104.0% in Q1, 104.5% in Q2, 107.6% in Q3 and 106.8% in Q4).

The highest growth was recorded in:
- manufacture of transport equipment (+19.2%)
- manufacture of machinery and equipment (+13.3%)
- manufacture of coke and refined petroleum products (+12.6%).

Industrial production decreased in:
- manufacture of leather and leather products (-4.6%)
- manufacture of textiles and textile products (-3.6%)
- manufacture of basic metals and fabricated metal products (-2.1%).

In the year 2005, industrial production increased in the following main industrial groupings: intermediate goods (+10.3%), consumer durables (+3.2%), capital goods (+3.0%), energy (+2.4%) and consumer non-durables (+2.2%).

Sales

In 2005, sales in industry were higher by 8.1% year-on-year (constant prices); they were higher by 5.5% in the Q1, 8.0% in Q2, 8.9% in Q3 and 9.8% in Q4. Sales increased most in: ‘manufacture of transport equipment‘ (+22.9%), ‘manufacture of machinery and equipment‘ (+14.1%) and ‘manufacture of rubber and plastic products‘ (+12.6%). They dropped in: ‘mining and quarrying of energy producing materials‘ (-5.4%), ‘manufacture of textile and textile products‘ (-3.1%) and ‘manufacture of food products, beverages and tobacco‘ (-2.5%).

In the breakdown by region of an enterprise seat, the fastest growing sales at current prices were in the Středočeský Region (index 118.2%), while in the Olomoucký Region the sales dropped (index 99.8%).

In the breakdown by size group according to number of employees, the fastest growing sales were in the group of 3,000 – 3,999 employees (172.4%). In the group of 4,000 – 4,999 employees the sales decreased (62.0%). Number of enterprises in this size category dropped (shift of an enterprise having number of employees close to the threshold to the lower category).

Direct exports

Direct export sales of industrial enterprises increased by 10.2% at constant prices (6.8% at current prices), and their share in total sales of industrial enterprises stood at 48.5%. Their biggest constant price growth occurred in ‘mining and quarrying‘ (+23.1%), ‘manufacturing n.e.c.‘ (+20.6%), ‘manufacture of transport equipment‘ (+18.8%) and ‘manufacture of machinery and equipment‘ (+17.9%). The biggest decreases were recorded for ‘manufacture of leather and leather products‘ (-10.0%), ‘electricity, gas and water supply‘ (-4.2%) and ‘manufacture of coke and refined petroleum products‘ (-3.0%).

Direct export sales index is influenced by changes in organization of trade. These changes (growth of export of production via trade organizations) caused a decrease in the direct export sales index in 2005.

Foreign-controlled enterprises

Sales in industry implemented by foreign-controlled enterprises grew by 14.9% at constant prices (12.3% at current prices), and their share in total sales stood at 54.8%. Direct export sales of these enterprises increased by 11.6% (7.3% at current prices) and accounted for 73.0% of total sales at current prices.

In 2005, there were 1,938 foreign-controlled enterprises operating in the industry; they employed 457.8 thousand persons. The average monthly nominal wage is 11.3% up on the average monthly nominal wage in the total industry.

Foreign-controlled enterprises thus markedly influence development of sales in industry, employment and average monthly nominal wages for the total industry.

Employment

In 2005, employment in the industry decreased by 1.5 thousand persons (-0.1%), dropping most in the following industries:
- manufacture of textile and textile products (-8.4%)
- manufacture of leather and leather products (-6.5%)
- mining and quarrying of energy producing materials (-4.2%).

Growth of employment was recorded for:
- manufacture of rubber and plastic products (+7.3%)
- manufacture of transport equipment (+7.0%).

Year-on-year development of the number of employees in regions by seat of an enterprise is relatively stable (from 95.5% to 103.8%). The highest y-o-y decrease in the average number of employees was observed in the Jihočeský Region (95.5%, i.e. –3 140 employees), in the Karlovarský Region (97.9%, i.e. –749 employees), in the Královéhradecký Region (98.0%, i.e. –1,353 employees), in the Moravskoslezský Region (98.1%, i.e. –2,756 employees), in the Pardubický Region (98.4%, i.e. –1,059 employees) and in the Vysočina Region (99.1%, i.e. –561 employees).

The highest growth of the average number of employees was recorded in the Středočeský Region (103.8% - i.e. +4,528 employees) and in the Plzeňský Region (102.9% - i.e. + 2,070 employees).

In the breakdown by size group, employment grew fastest in the group of 3,000 – 3, 999 employees (index 141.1%). The deepest fall of employment was in the group of 4,000 – 4,999 employees (index 76.0%) due to a decrease in number of enterprises in that size category (shift of an enterprise having number of employees close to the threshold to the lower category).

Wages

Average monthly nominal wage in the industry reached CZK 18,279 in 2005 and was 4.6% up year-on-year. The highest level of wages was recorded for:
- manufacture of coke and refined petroleum products
- electricity, gas and water supply
- 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
- manufacturing, n.e.c.

The highest y-o-y growth rate of the average monthly nominal wage (broken down by the region of an enterprise seat) was recorded in the Středočeský Region (105.9%), which is an increase of the average monthly nominal wage by CZK 1,130.

The lowest y-o-y growth rate of the average monthly nominal wage was in the Jihočeský Region (102.7%) and at the low base in the year 2004 (CZK 16,523) it was an increase of the average monthly nominal wage by CZK 439.

In the breakdown by size group, wages increased in almost all size categories; the biggest growth was in the group of 1,000 – 1,499 employees (index 108.4%). Only in the category of 3,000 – 3,999 employees the wages were decreasing (index 97.0%) while employment grew in that size category.

Labour productivity

In 2005, labour productivity in the industry went up by 8.2%, growing faster than average monthly nominal wage. The highest labour productivity increase was reported for manufacture of transport equipment (+14.8%) and manufacture of machinery and equipment (+13.4%). Unit wage costs dropped by 3.3%.

New orders (selected industries)

In 2005, new orders worth CZK 1,445.5 billion were signed and their volume was 7.3% up on 2004.
The growth was ascertained in:
- manufacture of machinery and equipment (+19.6%)
- manufacture of medical, precision and optical instruments, watches and clocks (+19.0%)
- manufacture of fabricated metal products, except machinery and equipment (+17.5%).

and decreased in:
- manufacture of wearing apparel; dressing and dyeing of fur (-15.2%)
- manufacture of other transport equipment (-11.5%)
- manufacture of textiles (-8.7%).

In 2005, new non-domestic orders worth CZK 933.5 billion were signed and their volume was 9.3% up on 2004.
Increases in the volume of new non-domestic orders were ascertained in:
- manufacture of radio, television and communication equipment and apparatus (+39.0%)
- manufacture of machinery and equipment (+25.9%)
- manufacture of other transport equipment (+18.7%)

and decreases in:
- manufacture of textiles (-2.8%)
- manufacture of basic metals (-2.3%)
- manufacture of wearing apparel; dressing and dyeing of fur (- 0.4%).

Development of industry in the EU

		Change (%)
		September 2005	October 2005	November 2005
Industrial production index  (corresponding period of previous year =100)	Eurozone   EU 25	1,2   1,3	0,2   0,4	2,6   2,1
Index of orders (current prices) (corresponding period of previous year =100)	Eurozone   EU 25	6,1   6,3	4,3   4,8	9,2   9,3
Industrial production index (SA) (previous month =100)	Eurozone     EU 25	-0,2   0,2	-0,7   -0,6	1,3   1,0
Index of orders  (SA) (previous month =100)	Eurozone   EU 25	1,7   0,6	-0,6   0,0	4,9   3,4

Sources: News release - 18 January 2006; Industrial production - Eurostat
News release - 24 January 2006; Industrial new orders - Eurostat
http://europa.eu.int/comm/eurostat/