Development of the industry - 4. quarter of 2006

In 2006 industrial production recorded a highly dynamic growth (9.7%, the highest figure since 2001). Also other industrial indicators grew in 2006. Employment was on the increase, the growth of wages corresponded to the growth of labour productivity.

The main factors of the high industrial growth were:
- marked external demand especially for products of the industries of motor cars and electrical engineering
- growth of production in new manufacturing and assembling plants, particularly in the industries of transport equipment and electrical engineering
- increase in manufacture of machinery and equipment, especially for the energy industry
- continuing recovery of manufacture of basic metals and fabricated metal products
- stable situation in the coverage of the needs of energy, mainly in the power generating industry

Industrial production

The year-on-year index of industrial production reached 109.7% in 2006 (114.8% in Q1, 108.6% in Q2, 108.0% in Q3, and 107.8% in Q4). The growth of industrial production was most affected by ‘manufacture of transport equipment’ (up by 20.6%, contribution +3.8 p.p. to growth of industry), ‘manufacture of electrical and optical equipment’ (up by 16.3%, contribution +2.1 p.p.) and ‘manufacture of basic metals and fabricated metal products’ (up by 8.9%, contribution +1.2 p.p.). Conversely, industrial production dropped in ‘manufacture of chemicals, chemical products and man-made fibres’ (down by 1.0%, contribution -0.1 p.p.) and ‘manufacture of textiles and textile products‘ (down by 1.7%, contribution -0.1 p.p.).

In 2006 production increased in all the main industrial groupings: durable consumer goods (+27.6%), capital goods (+18.3%), intermediate goods (+7.3%), energy (+2.0%), and non-durable consumer goods (+0.3%).

Sales

Sales from industrial activity (constant prices) were up by 10.3% year-on-year in 2006 (+15.6% in Q1, +8.9% in Q2, +8.0% in Q3, and +9.2% in Q4). The growth of sales from industrial activity was most affected by ‘manufacture of transport equipment’ (up by 20.5%, contribution +3.9 p.p.), ‘manufacture of electrical and optical equipment’ (up by 16.4%, contribution +2.4 p.p.) and ‘manufacture of machinery and equipment’ (up by 18.1%, contribution +1.4 p.p.). Sales from industrial activity decreased in ‘manufacture of coke, refined petroleum products and nuclear fuel’ (down by 3.6%, contribution -0.1 p.p.), ‘manufacture of chemicals, chemical products and man-made fibres’ (down by 1.2%, contribution -0.1 p.p.) and ‘manufacture of textiles and textile products’ (down by 2.6%, contribution -0.1 p.p.).

Direct exports

Direct export sales of industrial enterprises increased by 11.6% at constant prices and by 10.0% at current prices and their proportion in total sales of industrial enterprises was 48.5%. The highest volumes of direct export sales were reached in:
- manufacture of motor vehicles
- manufacture of electrical and optical equipment
- manufacture of machinery and equipment
- manufacture of basic metals and fabricated metal productsForeign-controlled enterprises

Sales from industrial activity of foreign-controlled enterprises grew by 18.4% at constant prices (+17.8% at current prices) and their proportion in total sales (current prices) was 58.7%.
There were 1 943 foreign-controlled industrial enterprises in 2006 which employed more than 474 thousand persons earning an average wage of CZK 21 596 (i.e. 11.3% above the average wage in total industry).

Employment

Employment in industry grew by 11.2 thousand persons (+1.0%) in 2006 (+1.5% in Q1, +1.2% in Q2, +1.1% in Q3, and +0.2% in Q4). The highest increases in employment were observed in ‘manufacture of rubber and plastic products’ (+0.8%), ‘manufacture of electrical and optical equipment’ (+5.2%), and ‘manufacture of basic metals and fabricated metal products (+4.6%). Employment dropped most in ‘manufacture of textiles and textile products’ (-9.4%), ‘electricity, gas and water supply’ (-5.2%) and ‘manufacture of leather and leather products’ (-4.6%). The average registered number of employees in industry was 1 139.8 thousand. In addition to these employees, 33.8 thousand employees of employment agencies and other companies worked with industrial organisations, most of them in ‘manufacture of transport equipment’ (8.9 thousand persons), ‘manufacture of electrical and optical equipment’ (8.2 thousand persons) and ‘manufacture of basic metals and fabricated metal products’ (5.5 thousand persons).

Wages

The average monthly nominal wage in industry reached CZK 19 400 in 2006 and was by 6.0% higher year-on-year (+6.4% in Q1, +6.5% in Q2, +5.3% in Q3, and +6.1% in Q4). The highest wage levels (average monthly nominal wage per employee) were registered in ‘manufacture of coke, refined petroleum products and nuclear fuel’, ‘electricity, gas and water supply’ and ‘mining and quarrying of energy producing materials’. The lowest wage levels were in ‘manufacture of leather and leather products’, ‘manufacture of textiles and textile products’ and ‘manufacturing n.e.c.’.

Labour productivity

Labour productivity in industry increased by 9.2% in 2006 and grew faster than the average monthly nominal wage (+4.0% in Q1, + 7.6% in Q2, +6.9% in Q3, and +9.0% in Q4). The highest increases in labour productivity were recorded in ‘manufacture of transport equipment’ (+15.5%), ‘manufacture of machinery and equipment’ (+15.2%) and ‘mining and quarrying of energy producing materials’ (+13.4%). Unit wage costs decreased by 2.9%.

New orders (selected industries)

New orders worth CZK 1 720.1 billion were signed in 2006, which was up by 18.8% year-on-year (+23.8% in Q1, +19.9% in Q2, +15.4% in Q3, and +16.1% in Q4). The growth of new orders was most contributed to by ‘manufacture of motor vehicle’ (up by 26.4%, contribution +7.1 p.p.), ‘manufacture of machinery and equipment’ (up by 32.7%, contribution +3.9 p.p.) and ‘manufacture of basic metals and fabricated metal products’ (up by 12.3%, contribution +1.7 p.p.). New orders in total decreased in ‘manufacture of wearing apparel; dressing and dyeing of fur’ (down by 10.0%, contribution -0.1 p.p.) and ‘manufacture of pulp, paper and paper products’ (down by 1.4%, contribution -0.1%).

New non-domestic orders worth CZK 1 088.4 billion were signed in 2006, which was by 16.5% more year-on-year (+19.8% in Q1, +12.6% in Q2, +14.6% in Q3, and +18.9% in Q4). The growth of new non-domestic orders was most attributable to ‘manufacture of motor vehicles’ (up by 20.7%, contribution +6.4 p.p.), ‘manufacture of machinery and equipment’ (up by 29.6%, contribution 3.6 p.p.) and ‘manufacture of electrical and optical equipment’ (up by 19.6%, contribution +1.9 p.p.). New non-domestic orders decreased in ‘manufacture of office machinery and computers’ (down by 17.4%, contribution -1.1 p.p.), ‘manufacture of pulp, paper and paper products’ (down by 5.8%, contribution -0.2 p.p.) and ‘manufacture of wearing apparel; dressing and dyeing of fur’ (down by 10.3%, contribution -0.1 p.p.).

Industry in the EU

Source: Eurostat database; retrieved on 9 February 2007; Industrial production - Eurostat
News Release - 23 January 2007; Industrial new orders - Eurostat
http://epp.eurostat.ec.europa.eu/