Selected economy indicators - February 2006

In January the y-o-y enlargement in industrial production accelerated and reached the record-breaking level over last five years. The y-o-y growth of construction output dropped. For the first time since the CR accessed to the EU volume of imports expanded more than exports, so that the January trade balance ended in surplus again.
In February the y-o-y level of consumer prices next to did not change. Total number of registered unemployed people dropped in February but lesser than in February 2005.
JANUARY 2006

Industry

In January the y-o-y industrial production index reached 115.1 ¹ (it was one more day than a year ago) due to favourable development in manufacturing of transport equipment (+ 39.7%), manufacturing of electrical and optical devices and manufacturing and servicing of machinery and machinery equipment. Decreases were recorded in mining of other mineral resources, manufacturing of textile and textile products and manufacturing of other non-metallic mineral products. The m-o-m seasonally adjusted industrial production increased by 2.8%; the trend has concurrently been growing up.

In January sales in industry were higher by 16.3% y-o-y (at constant prices), direct export sales increased by 14.0%. Industrial foreign-controlled enterprises increased its sales in industry by 26.6%; its share in total sales was up by 58.8%. Direct export sales there were up by 16.4%. Number of employees in industry increased (by 2.3%, i. e. by 25.8 thousand people) y-o-y; labour productivity (sales per employee) was 13.7% up. The y-o-y average monthly wage amounted to CZK 18 008 was up both nominally and really by 6.3% and 3.3%, respectively. Labour productivity grew faster and outstripped increase of average wages. As a result unit wage costs decreased by 6.5%.

The y-o-y volume of new orders in selected industrial branches increased by 19.3% in January. Volume of new foreign orders enlarged by 9.6%.

Construction

Construction output in January dropped by 1.2% y-o-y (at constant prices). Despite of higher number of working days in January 2006, manual workers worked out fewer hours on a year before, owing to colder weather than in January 2005. Drop in construction work on maintenance and repairs outweighed its growth in new constructions, reconstructions and modernizations. Employment in construction enterprises with 20+ employees rose by 1.7% than in January 2005. The y-o-y average monthly wage reached CZK 17 485 and increased by 9.0% nominally and by 5.9% in real terms. Labour productivity decreased by 2.2% per employee, unit wage costs jumped by 11.5%. In terms of real comparison the m-o-m seasonally adjusted construction outputs decreased by 1.8 %, the trends slowed down during two months already.

In January 2006 planning and building control authorities granted 8 652 dwellings to be constructed, which was by 0.7% less y-o-y; the approximate value of newly permitted dwellings reached CZK 18.3 bn. It was permitted 2 887 new dwellings, which is by 642 more than in January 2005.

External trade

In January the trade balance ended in a surplus of CZK 11.2 bn, i. e. less by CZK 0.7 bn than a year ago. The y-o-y volume of both exports and imports enlarged by 11.2% and 12.8%, respectively (at current prices). For the last time in April 2004 volume of imports and imports grew faster, so the last month before the accession to the EU. Due to the appreciation of the koruna against EUR exports and imports rose faster in terms of euros, due to the depreciation of the Czech koruna against USD exports and imports rose slower in dollars. Trade balance with EU member states was active by CZK 33.3 bn, with non-EU states passive by CZK 22.1 bn. The figures were favourably influenced by trade in machinery and transport equipment (+CZK 5.4 bn), on the other hand trade balance deficit worsened in trade in mineral fuels and chemical products (deficit up by CZK 5.6 bn). According to preliminary data, m-o-m seasonally adjusted exports and imports expanded by 2.4% and 4.4%, respectively. Trends of both exports and imports went up by 0.8% and 1.3%, respectively.

FEBRUARY 2006

Consumer prices

In February, m-o-m consumer prices increased minimally by 0.1%; due to prices of services by 0.3%, in total prices of goods remained at the last month level. Prices in recreation and culture increased most (prices of winter holiday stays), other kinds of goods and services (fees for housing in houses for seniors), hotels and restaurants (prices in canteens and restaurants). Reverse way acted sales of winter clothing and footwear, decrease of fees for post and telecommunication services (instalment of fixed telephone line, minutes free for local and long-distance calls). The y-o-y rise in consumer prices increased by 2.8% and decelerated by 0.1 p. p. as against January. Prices in housing (mainly prices of natural gas by +25.4%, electricity by +9.0%, heat and hot water supply by +10.9%) increased most. Prices of automotive fuel jumped by 13.9%, also prices in post and telecommunication services went up sizeably (by 13.2%). A long-term drop in prices of clothing and footwear, furnishing and housing equipment level had an impact on price-cutting; prices of food and non-alcoholic beverages were also slightly lower. In terms of y-o-y comparison, prices of goods increased by 2.3%, prices of services were higher by 3.7%. Inflation rate, i. e. an increase in the average consumer price index for last 12 months related to the average CPI for the preceding 12 months, amounted to 2.1% in February that was by 0.1 p. p. more than in January.

In February 2006 the y-o-y increase of harmonised index of consumer prices reached 2.4% in the Czech Republic (according to a flash estimate, the HICP in Euro-zone was 2.3%).

Unemployment

The registered unemployment rate decreased in February 2006 y-o-y, however less on a year before. It reached 9.1% at the end of the month what means a drop by 0.1 p. p. in comparison to January, in terms of y-o-y comparison it decreased by 0.6 p. p. The females’ unemployment rate was 10.4%; the unemployment rate of males was 8.1%. Labour offices registered 528.2 thousand job applicants at the end of February, which is approx. by 26.9 thousand people less as against February 2005. Share in number of unemployed freshly graduated students to the total number of unemployed people went down to 7.1% (fall by 0.1 p. p. as against last month); however last year reached 7.8%. Number of applicants per one job opportunity was 7.9 at the end of February; at the end of February 2005 it was 9.9 persons.

Harmonised unemployment rate ²
has been published by Eurostat to obtain an international comparison, reached 8.0 % in the Czech Republic in February and was by 0.5 p. p. lower than a year ago.

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¹ Starting from the results for January 2006, IPI results are processed according to the new methodology, which was published in the Press Release of 10 March 2006 ( http://www.czso.cz/eng/redakce.nsf/i/change_of_methodology_for_the_industrial_production_index

² This estimation
- comprises integrated methodology in the EU (processed by Eurostat)
- is based on the quarterly level of unemployment rate (according to ILO) and selected surveys of labour forces (SSLF) proceeded in households
- is based on trends of the registered unemployment rate (Ministry of Labour and Social Affairs of the Czech Republic), then the monthly distribution is being carried out

This press release was not edited for language.

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