Selected economy indicators - February 2007

The volume of industrial production y-o-y enlarged by almost 10% in January. Due to extremely warm weather in winter the volume of construction output reached extraordinary results. Growth paces of imports outstripped that of exports (during five previous months it was contrariwise), in January the trade balance ended in a lower surplus than in the last year.

In February, the y-o-y level of consumer prices was higher compared to January, the y-o-y growth of prices accelerated. In February the registered unemployment rate dropped faster on a year before.
JANUARY 2007

Industry

In January, the y-o-y volume of industrial production increased highly by 9.8%, which was almost similar growth to the average enlargement in 2006. In total, manufacturing of means of transport and equipment contributed to this growth by 2.4 p.p. (growth of the branch by 10.7%), manufacturing of electrical and optical appliances contributed by next 1.9 p.p. (growth by 16.4%) and manufacturing of rubber and plastic products by 1.5 p.p. (growth by 27.9%). On the other hand, the volume of production lessened only in two branches of processing industry and in mining of energy producing raw materials and manufacturing of electricity, gas and water. The m-o-m seasonally adjusted industrial production increased by 2.3%, the trend has concurrently been growing up by 0.7%.

In January, sales in industry were higher by 11.0% in terms of real comparison y-o-y, direct export sales increased by 17.6%. Industrial foreign-controlled enterprises increased its sales in industry by 13.6% and direct export sales by 17.1%. Its share in total sales was 60.5% at current prices; in January 2006 it was 59.0%.

Number of employees in industry increased by 2.4%, (i. e. by 26.4 thousand people) y-o-y; labour productivity (sales per employee) was by 7.8% up. The y-o-y average monthly wage amounted to CZK 19 907 was up both nominally and really by 9.2% and 7.8 %, respectively. Labour productivity grew lower than increase of average wages; therefore unit wage costs increased by 1.3%.

The y-o-y volume of new orders in selected industrial branches enlarged rapidly, its y-o-y value increased by 9.5% in January. Value of new foreign orders enlarged by 13.1%.

Construction

In January, the y-o-y volume of construction output was higher by 29.2% (at constant prices). A favourable course of winter weather has been continuing and enabled to conduct all construction work. Volume of construction work enlarged in all types of construction, especially in building construction.

In construction enterprises (with 20+ employees), volume of new constructions, reconstructions and modernization in building construction (by 24.3 p. p.) and construction work abroad (1.7 p. p.) affected this growth most favourably. In terms of real comparison the m-o-m seasonally adjusted construction outputs increased really by 3.1%, the m-o-m trends grew by 2.1%. Number of employees in construction enterprises (with 20+ employees) dropped by 0.5% as against January 2006. The y-o-y average monthly wage reached CZK 19 462 and increased nominally by 15.5% and by 14.0 % in real terms. Labour productivity increased by 29.4% per employee and unit wage costs decreased by 10.7%.

In January, planning and building control authorities granted by 2.8% y-o-y less construction permissions to be constructed. The approximate value of newly permitted constructions arrived at CZK 19.8 bn was almost by 7.7% higher on a year before. It expanded in other kinds of construction; construction permits of buried/underground services, highways and environmental constructions (sewage water treatment plants incl. sewerage) affected most this favourable development.

External trade

In January, the y-o-y value of both exports and imports enlarged by 13.8% and 15.5%, respectively (all at current prices). Due to the appreciation of the koruna against EUR and USD exports and imports rose faster in terms of both euros and dollars. The trade balance ended in a surplus of CZK 11.0 bn, i. e. less by CZK 1.0 bn than a year ago. Trade balance with EU 27 member states was active by CZK 38.8 bn, with non-EU 27 states passive by CZK 27.8 bn. Decrease in trade deficit in mineral fuels, lubricants and related materials had a positive effect on trade balance y-o-y, on the other hand drop in trade surplus of machinery and transport equipment had a reverse effect. According to preliminary data, m-o-m seasonally adjusted exports increased by 1.4%, imports by 6.4%. Trends of both exports and imports came up by 1.6% and 1.1%, respectively.


FEBRUARY 2007

Consumer prices ¹

In February, m-o-m consumer prices level increased by 0.3%; prices of goods by 0.1%, prices of services by 0.5%. This jump was brought on increase in prices of tobacco products by 3.3% (delay of consumer tax increase from April 2006), moderate increase in prices of housing and increase in prices of package holidays. As a result of a change of the law on social services providing, prices of social services jumped by 12%. The y-o-y growth of consumer prices accelerated to 1.5% (more by 0.2 p.p. than in January 2007). The y-o-y growth in consumer prices (0.6 p.p.) affected most markedly price changes in housing, water, energy and fuel. The second one influence on price increase (0.5 p.p.) had prices in food and non-alcoholic drinks and the third one (0.3 p. p.) prices of alcoholic drinks and tobacco. Prices level of goods y-o-y increased by 0.4%, prices of services by 3.2%.

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 2.3% in February, i. e. less by 0.1p.p. than in January 2007.

In February 2007, the y-o-y increase of harmonised index of consumer prices reached 1.7% in the Czech Republic (according to a flash estimate of Eurostat, the HICP in Euro-zone was 1.8%).

Unemployment

The registered unemployment rate in February 2007 decreased by 0.2 p. p. against January, which was more on a year before. At the end of the month the registered unemployment rate reached 7.7%; it decreased by 1.4 p. p. as against end of February 2006. The females’ unemployment rate was 9.1%; the unemployment rate of males was 6.6%. Labour offices registered 454.7 thousand job applicants at the end of February, which is approx. less by 10.7 thousand people as against last month. As against end of February 2006 it declined markedly by almost 14%. Share in number of unemployed freshly graduated students and juveniles to the number of unemployed people has been dropping faster and its share in total number of unemployed people went down by 0.2 p.p. to 6.5%, last year arrived to 7.1%. For the second time, in the history of the Czech Republic number of job opportunities exceeded 100 thousand (firstly in November 2006). Number of applicants per one job opportunity was 4.3 at the end of February; compared to February 2006, when it was 7.9 persons.

Harmonised unemployment rate ² has been published by Eurostat to obtain an international comparison, reached 6.9% in the Czech Republic in February and was by 1.1 p. p. lower than a year ago.


This press release was not edited for language.

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¹ Starting January 2007 consumer prices indices has been calculating in accordance with revised consumption basket, which respects the 2005 weight structure. By this revision of calculation, data published to the end of December 2006 did not change.
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