Development of the industry - 4. quarter of 2007

In Q4 2007 all industrial indicators grew. In comparison to Q4 2006, on the increase were production, employment, labour productivity and volumes of new orders. These indicators grew by rates not far from the Q3 2007 figures; new orders slowed down slightly. The main factors of high industrial growth were:
- growth driven by new production capacities, especially of foreign investors (mainly electrical engineering industry, manufacture of transport equipment and manufacture of rubber and plastic products),
- strong external demand.


Industrial production

Industrial growth in total and its dynamics

The year-on-year industrial production index in Q4 2007 reached 106.2%; 105.8% adjusted for seasonal effects. Compared to the y-o-y production growth in Q3 2007 (index 106.1%), the growth rate of industrial production moderately increased.

Development in NACE subsections and main industrial groupings


The main contributors to the growth of industrial production in Q4 2007 were ‘ manufacture of transport equipment' (contribution to the industrial growth in total 3.5 percentage points, growth by 18.0%), ‘manufacture of electrical and optical equipment‘ (contribution 2.1 p.p., growth by 12.0%) and ‘manufacture of machinery and equipment‘ (contribution 0.8 p.p., growth by 11.2%). Industrial production decreased in ‘ manufacture of coke and refined petroleum products‘ (contribution -0.6 p.p., decrease by 16.8%) due to planned outage of production facility. Production decreased also in ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution -0.4 p.p., decrease by 8.1%) and ‘manufacture of textiles and textile products’ (contribution -0.2 p.p., decrease by 6.8%).

In Q4 2007 production increased in main industrial groupings durable consumer goods (+29.0%), capital goods (+14.0%) and intermediate goods (+2.0%). Production decreased in main industrial groupings non-durable consumer goods (-3.0%) and energy (-1.7%).


Sales

Growth and dynamics

In Q4 2007 receipts from industrial activity at constant prices were higher by 6.6% year-on-year; by 6.4% adjusted for seasonal effects. Receipts at current prices rose by 7.7% year-on-year.

The main contributors to the growth of receipts from industrial activity were ‘manufacture of transport equipment' (contribution to the industrial growth in total 3.6 percentage points, growth by 18.0%), ‘manufacture of electrical and optical equipment‘ (contribution 1.7 p.p., growth by 9.3%) and ‘manufacture of machinery and equipment‘ (contribution 1.0 p.p., growth by 11.0%). Receipts from industrial activity decreased in ‘ manufacture of coke and refined petroleum products‘ (contribution -0.5 p.p., decrease by 23.1%), ‘manufacture of chemicals, chemical products and man-made fibres’ (contribution -0.4 p.p., decrease by 8.3%) and 'manufacture of food products, beverages and tobacco‘ (contribution -0.2 p.p., decrease by 2.6%).Direct export sales and sales of foreign-controlled enterprises

In Q4 2007 direct export sales of industrial enterprises grew faster than receipts from industrial activity in total – by 9.0% at constant prices and by 8.2% at current prices. Their share in total sales of industrial enterprises made up 48.5% and compared to Q4 2006 it slightly increased (from 48.2%). The highest increases by volume of sales (constant prices) were recorded in ‘manufacture of transport equipment‘ (by 17.2%), ‘manufacture of electrical and optical equipment‘ (by 3.7%) and ‘manufacture of machinery and equipment‘ (by 11.8%).

Receipts from industrial activity of foreign-controlled enterprises recorded a growth too. They rose by 9.2% at constant prices (by 9.3% at current prices). Their share in total sales at current prices stood at 59.2%; compared to Q4 2006, it dropped (from 60.0%). In foreign-controlled enterprises 62.0% were direct export sales.


Employment, wages and labour productivity

Employment

In Q4 2007 employment in industry increased by 13.4 thousand persons year-on year, i.e. by 1.2%. The average number of employees in industry was 1 172 thousand persons.

Employment increased most in ‘ manufacture of rubber and plastic products‘ (+7.6%), ‘manufacture of transport equipment‘ (+5.7%) and ‘manufacture of machinery and equipment‘ (+4.7%). Employment dropped most in ‘manufacture of textiles and textile products‘ (-8.8%), 'manufacture of leather and leather products (-8.0%) and ‘mining and quarrying of energy producing materials‘ (-5.4%).

Foreign-controlled enterprises employed 528.2 thousand persons, i.e. 45.1 % of the total number of employees in industry: Their percentage increased compared to Q4 2006 when it stood at 41.9%.

Besides the above number, 47.8 thousand persons in industrial organisations were agency workers and employees of other companies (y-o-y growth by 23.7%), mostly in ‘manufacture of electrical and optical equipment‘ (14.6 thousand persons, growth by 39.7%), ‘manufacture of transport equipment‘ (11.2 thousand persons, growth by 17.6%) and ‘manufacture of basic metals and fabricated metal products‘ (6.2 thousand persons, growth by 8.1%).

Wages

In Q4 2007 the average monthly wage in industry reached CZK 22 686 and was up by 6.9% year-on-year.The highest level of wages was recorded in ‘ manufacture of coke and refined petroleum products‘ (CZK 35 272), ‘electricity, gas and water supply‘ (CZK 31 869) and ‘mining and quarrying of energy producing materials‘ (CZK 31 204). The lowest level of wages was in: ‘manufacture of leather and leather products‘ (CZK 13 879), ‘manufacture of textiles and textile products‘ (CZK 14 659) and ‘manufacturing n.e.c.‘ (CZK 18 380). The highest growth was recorded for 'manufacture of other non-metallic mineral products' (by 9.1% to CZK 23 436), ‘manufacture of basic metals and fabricated metal products‘ (by 8.4% to CZK 22 428) and ‘manufacture of wood and wood products‘ (by 8.2% to CZK 18 586).

Average wage in foreign-controlled enterprises was CZK 24 920, i.e. by 9.8% more than average wage in industry in total. It grew by 7.0 % year-on-year.

Labour productivity

In Q4 2007 labour productivity in industry increased by 4.7%.


New orders

New orders (total)

In Q4 2007 new orders in selected NACE subsections increased by 7.8% year-on-year. The main contributors to the growth were ‘manufacture of machinery and equipment‘ (contribution 2.8 p.p., growth by 21.4%), ‘manufacture of motor vehicles, trailers and semi-trailers‘ (contribution 2.5 p.p., growth by 8.8%) and ‘manufacture of other transport equipment‘ (contribution 2.3 p.p., growth by 101.5%). Drop of new orders was recorded for ‘manufacture of basic metals and fabricated metal products‘ (contribution -1.7 p.p., decrease by 13.0%), ‘manufacture of radio, television and communication equipment and apparatus‘ (contribution -0.2 p.p., decrease by 3.8%) and 'manufacture of office machinery and computers’ (contribution -0.2 p.p., decrease by 2.4%).

New non-domestic orders

In Q4 2007 new non-domestic orders in selected NACE subsections increased by 5.1% year-on-year. Increases in the volume of new non-domestic orders were registered in ‘manufacture of motor vehicles, trailers and semi-trailers‘ (contribution 3.3 p.p., growth by 10.6%), ‘manufacture of machinery and equipment‘ (contribution 2.3 p.p., growth by 16.7%) and ‘manufacture of electrical machinery and apparatus‘ (contribution 1.1 p.p., growth by 10.6%). New non-domestic orders decreased in ‘manufacture of office machinery and computers‘ (contribution -1.5 p.p., decrease by 26.0%), ‘manufacture of radio, television and communication equipment and apparatus‘ (contribution -1.3 p.p., decrease by 17.1%) and ‘manufacture of basic metals and fabricated metal products‘ (contribution -0.5 p.p., decrease by 5.5%).

The y-o-y industrial production index for the year 2007 reached 108.2%; 108.1% adjusted for seasonal effects. In comparison to the year-on-year growth rate of production in the year 2006 (index 111.2%), dynamics of industrial growth in total decreased.

The main contributors to the growth of industrial production were ‘manufacture of transport equipment’ (contribution to the industrial growth in total 2.8 percentage points, growth by 13.9%), ‘manufacture of electrical and optical equipment’ (contribution 2.2 p.p., growth by 15.7%) and ‘manufacture of machinery and equipment’ (contribution 1.2 p.p., growth by 17.5%). Industrial production decreased in ‘manufacture of coke and refined petroleum products’ (contribution -0.2 p.p., decrease by 4.3%), ‘manufacture of basic metals and fabricated metal products’ (contribution -0.1 p.p., decrease by 0.6%) and ‘mining and quarrying of energy producing materials’ (contribution -0.1 p.p., decrease by 3.0%).

The growth of production follows the trend of sales which increased by 9.3% (constant prices) and 11.1% (current prices) year-on-year. The main contributors to the growth of receipts from industrial activity were ‘manufacture of transport equipment’ (contribution to the industrial growth in total 2.9 p.p., growth by 13.9%), ‘manufacture of electrical and optical equipment’ (contribution 2.1 p.p., growth by 13.5%) and ‘manufacture of machinery and equipment’ (contribution 1.4 p.p., growth by 17.3%). Receipts from industrial activity fell most in ‘manufacture of coke and refined petroleum products’ (contribution -0.1 p.p., decrease by 4.4%).

Changes in the structure due to sales

Among individual subsections, the highest shares in the year 2007 were recorded for ‘ manufacture of transport equipment‘ (18.7% in receipts from industrial activity for industry in total), ‘manufacture of electrical and optical equipment‘ (14.5%) and ‘manufacture of basic metals and fabricated metal products‘ (13.0%). Compared to the year 2006, no significant changes were registered in the structure of receipts from industrial activity; the below graph compares structures over a longer period of time, which, i.a., documents the growing importance of the car industry and ‘manufacture of electrical and optical equipment‘.

Direct export sales in the year 2007 grew by 13.0% (constant prices) and 13.9% (current prices) year-on-year. Their share in total direct export sales (current prices) was 49.9%.

Employment increased by 21.1 thousand persons, i.e. 1.8%, in comparison to the year 2006. The average monthly wage in the year 2007 reached CZK 21 048 (+7.4%). Labour productivity in industry was up by 6.6%.

In 2007 new orders in selected NACE subsections increased by 9.8% year-on-year. The main contributors to the growth of new orders were ‘manufacture of motor vehicles’ (contribution 2.5 p.p., growth by 8.8%), ‘manufacture of machinery and equipment’ (contribution 2.4 p.p., growth by 18.2%) and ‘manufacture of electrical machinery and apparatus’ (contribution 1.7 p.p., growth by 18.4%). New orders decreased in ‘manufacture of basic metals and fabricated metal products’ (contribution -0.5 p.p., decrease by 3.7%) and ‘manufacture of wearing apparel; dressing and dyeing of fur’ (contribution -0.01 p.p., decrease by 3.5%).

New non-domestic orders in selected NACE subsections were up by 11.8% year-on-year. Growth of new non-domestic orders was registered in ‘manufacture of motor vehicles’ (contribution 3.5 p.p., growth by 11.0%), ‘manufacture of machinery and equipment’ (contribution 3.2 p.p., growth by 23.4%) and ‘manufacture of electrical machinery and apparatus’ (contribution 1.7 p.p., growth by 16.2%). Decreases of new non-domestic orders were recorded in ‘manufacture of radio, television and communication equipment and apparatus‘ (contribution -0.5 p.p., decrease by 6.9%) and ‘manufacture of wearing apparel; dressing and dyeing of fur’ (contribution -0.02 p.p., decrease by 3.4%).