Selected economy indicators - January 2006

Volume of industrial production sustained long-term growth that was mainly affected by industrial production growth in foreign-controlled enterprises also in December. The y-o-y volume of construction output was higher than in November. The y-o-y expansion of exports overtook volume of imports so that the December trade balance ended in a deficit.

The m-o-m consumer prices level as well as the y-o-y consumer prices level increased in January as a result of prices increase in energy and housing. In January the registered unemployment went up as usual; however less on a year before.
DECEMBER 2005

Industry

In December the y-o-y industrial production increased by 7.1%. This growth was mainly contributed by manufacturing of transport equipment (increase by 26.1%), manufacturing of chemicals and chemical products, and manufacturing n. e. c. Decreases were recorded in mining and quarrying except energy producing materials, manufacturing of leather and leather products and manufacture of other non-metallic mineral products. The m-o-m seasonally adjusted industrial production increased by 0.2%, the trend has concurrently been growing up.

In December sales in industry were higher by 8.4% y-o-y (at constant prices), direct export sales were up by 6.7%. Industrial foreign-controlled enterprises increased its sales in industry by 13.6%. Its share in total sales was 52.1%. Number of employees in industry increased by 0.2% (i. e. by 2.2 thousand people). Labour productivity (sales per employee) was 8.2% up. The y-o-y average monthly wage amounted to CZK 19 629 was up both nominally and really by 3.7% and 1.5%, respectively. Labour productivity grew faster and outstripped increase of average wages. As a result unit wage costs decreased by 4.2%.

The y-o-y volume of new orders in selected industrial branches increased by 10.1% in December. Volume of new foreign orders enlarged by 13.2%.

In 2005 industrial production enlarged by 5.7%, as against 2004; in Q1 by 4.0%, in Q2 by 4.5%, in Q3 by 7.6% and in Q4 by 5.7%. The growth trend was lower than in 2004. Sales in industry rose by 8.1% in real terms especially due to exports in industry. An average monthly nominal wage increased by 4.6% nominally and by 2.6% really; by minimal decreases in employment in industry. As a result labour productivity grew by 8.2%, y-o-y unit wage costs dropped by 3.3%.

Construction

In December the construction output continued growing and was by 8.6% higher y-o-y (at constant prices). Higher growth of construction work was reached especially in civil engineering, in new construction, reconstructions and modernisations (by 28.3%), but also in repair and maintenance (by 7.0%). Employment in construction enterprises with 20+ employees rose by 6.8% than in December 2004. The average monthly wage reached CZK 20 189 and decreased by 1.3% nominally and by 3.4% in real terms y-o-y. Labour productivity per employee was up by 1.0%; as a result unit wage costs reduced by 2.2%. In terms of real comparison the m-o-m seasonally adjusted construction outputs increased by 0.9 %, the trend was just like in November.

In December 2005 planning and building control authorities granted 11.645 dwellings to be constructed was less by 8.5% y-o-y. The approximate value of newly permitted dwellings reached CZK 23.2 billion. The planning and building authorities permitted 3 792 dwellings to be constructed, which was more by 686 ones than in the equal period 2004.

In 2005 the y-o-y construction output was up by 4.2% in real terms, the trend accelerated in the course of the year. Whilst in Q1 did not reach the 2004 level by 3.2%, in Q2 went up imperceptibly as against the equal period 2004, in Q3 went up by 7.3% and in Q4 was up by 9.7%. Labour productivity rose only by 0.2% in construction enterprises with 20+ employees as against growth of employment; the average monthly wage increased by 3.8% nominally and by 1.9% in real terms. Unit wage costs enlarged by 3.6%.

External trade

In terms of y-o-y comparison, the December external trade reached historically lowest deficit amounted to CZK 3.9 billion (on a year before it was CZK 9.6 billion). Exports and imports were up by 7.8% and 3.4% (at current prices) y-o-y. Due to the appreciation of the Czech koruna against the euro and the depreciation against the US dollar, external trade grew faster in term of euros and slower in US dollars; even volume of imports lessened. Trade balance with EU member states was active by CZK 14.1 billion and with the non-EU states passive by CZK 18.0 billion. The improvement of the balance was most markedly contributed by a CZK 7.5 billion increase in surplus of trade in machinery and transport equipment; a CZK 4.0 billion decrease in mineral fuels had an unfavourable impact. According to preliminary data, m-o-m seasonally adjusted exports and imports went down by 1.5% and 4.0%, respectively.

In 2005 in terms of y-o-y comparison both exports and imports grew by 8.6% and 4.6%, respectively. For the first time in the Czech Republic history trade balance reached a surplus amounted to CZK 41.9 billion (in comparison to the deficit amounted to CZK 26.4 billion had been attained in 2004). In the course of quarters the Q1 surplus amounted to CZK 27.6 billion dropped to CZK 14.3 billion in Q2 and went down to CZK 0.3 billion in Q4. In Q4 the trade balance was negative, amounted to CZK 0.3 billion.

According to preliminary recalculations of foreign trade results (at constant prices) in real terms the y-o-y volume of exports and imports expanded by 10% and more than 4%, respectively; as a result assets reached around CZK 73 billion. The y-o-y trade balance improved almost by CZK 100 billion.


JANUARY 2006

Consumer prices

In January, the m-o-m level of consumer prices increased by 1.4% (administratively influenced prices accounted for + 0.9 percentage points, market prices +0.5 percentage points); in total prices of goods and prices of services rose identically. The increase in consumer prices was brought about mainly in housing, water, electricity, gas and other fuel, rentals for housing in cooperative dwellings and imputed rentals of owner-occupiers; prices of food, non-alcoholic and alcoholic beverages, recreational stays and culture. The sale of winter kinds of cloth and footwear had a reverse effect on the price level. In terms of y-o-y comparison, consumer prices level accelerated growth to 2.9% (by 0.7 percentage points more than in December 2005). A dominant influence on the y-o-y increase in consumer prices was recorded for prices in housing, (prices for gas increased by 25.4%, electricity by 9.0%, heat and hot water by 10.3%, water supply by 4.2% and sewerage collection by 6.1% and refuse collection by 4.4%). On the other hand, a drop in the price level brought about by a long-term fall in prices of clothing and footwear, furnishings, household equipment. In total, prices of goods went up by 2.2% as well as prices of services by 3.9%.

The y-o-y 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 2.0% in January, which was by 0.1 p. p. higher as against last month.

According to data published by Eurostat the y-o-y increase of harmonised index of consumer prices reached 2.4% in the Czech Republic in January 2006 (according to a flash estimate, the HICP in Euro-zone was also 2.4%).

Unemployment

In terms of m-o-m comparison, unemployment increased in January 2006. The registered unemployment rate according to a current methodology reached 9.2% at the end of January and increased by 0.3 p. p. as against December 2005. In terms of y-o-y comparison, it decreased by 0.6 p.p. The females’ unemployment rate was 10.6%; the unemployment rate of males’ was 8.1%. Labour offices registered 531.2 thousand job applicants at the end of January, which is approx. by 30.4 thousand people less as against January 2005. There were 498.6 thousand of unemployed job applicants being able to take a job immediately, which was less by 28.4 thousand of persons as against January 2005. Share in number of unemployed freshly graduated students to the total number of unemployed people went down to 7.2% (fall by 0.4 p. p. as against last month; 8.1% as against last year). Number of applicants per one job opportunity was 8.9 at the end of January; compared to 10.4 job applicants as against last year.

Harmonised unemployment rate ¹ has been calculated by Eurostat to obtain an international comparison, reached 7.9% in the Czech Republic in January and was by 0.5 p. p. lower than a year ago.
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¹ 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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