Selected economy indicators - January 2007

The y-o-y growth of volume of industrial production was the lowest one in December in 2006-year, whilst on the contrary volume of construction output enlargement most affected warm weather in December, both with lower number of working days compared to December 2005. The y-o-y volume of exports outstripped volume of imports, so that the trade balance was negative in December.

In January, the y-o-y level of consumer prices increased compared to December, especially due to growth of administratively affected prices. The registered unemployment rate has traditionally been rising in January, however lower on a year before.
DECEMBER 2006

Industry

In December, the y-o-y volume of industrial production increased only by 3.0%, which was the lowest growth in 2006. There was less two working days, compared to December 2005; after working days adjustment industrial production was by 6.9% higher on a year before. In total, favourable development (contribution by 1.3 p.p.) was recorded in manufacturing of electrical and optical appliances (growth by 8.9%) and manufacturing of means of transport and equipment (growth by 7.1%), manufacturing and servicing - contribution next 1.2 p.p. (growth by 18.2%). On the other hand, in one half of all branches of processing industry the volume of production lessened. The m-o-m seasonally adjusted industrial production decreased by 0.5%, the trend has concurrently been growing up by 0.5%.

In December, sales in industry were higher by 4.9% in terms of real comparison (after working days adjustment by 8.6%) y-o-y, direct export sales increased by 9.6%. Industrial foreign-controlled enterprises increased its sales in industry by 13.1% and direct export sales by 14.0%. Its share in total sales was 56.3% at current prices; in December 2005 it was 52.3%.

Number of employees in industry increased by 0.3%, (i. e. by 3.0 thousand people) y-o-y; labour productivity (sales per employee) was by 4.6% up. The y-o-y average monthly wage amounted to CZK 20 699 was up both nominally and really by 5.0% and 3.2 %, respectively. Labour productivity grew lower than increase of average wages; therefore unit wage costs increased by 0.4%.

The y-o-y volume of new orders in selected industrial branches enlarged rapidly, its y-o-y value increased by 9.2% in December. Value of new foreign orders enlarged by 13.9%.

In 2006, as against 2005 volume of industrial production expanded by 9.7%, the y-o-y growth in individual quarters has constantly been dropping from 14.8% in Q1 to 8.6% in Q2, to 8.0% in Q3 and to 7.8% in Q4. The yearly trend of growth was by 3.0 p.p. higher than in 2005. In terms of real comparison, sales in industry jumped by 10.3%, direct export sales were up by 11.6%. By increased number of employees in industry by 1.0% an average monthly wage amounted to CZK 19 400 enlarged nominally and really by 6.0% and 3.4%. Labour productivity went up by 9.2%, the y-o-y unit wage costs dropped by 2.9%.

Construction

In December, the y-o-y volume of construction output was higher by 15.4% (at constant prices), after working days adjustment even by 18.8%. Volume of construction work enlarged in all types of construction as warm weather facilitated to work at full capacity. In construction enterprises (with 20+ employees), volume of new constructions, reconstructions and modernization in civil engineering (by 11.6 p. p.) and construction work abroad (2.0 p. p.) affected this growth most favourably. Number of employees in construction enterprises (with 20+ employees) dropped by 0.2% as against December 2005. The y-o-y average monthly wage reached CZK 22 699 and increased nominally by 12.4% and by 10.5 % in real terms. Labour productivity increased by 15.7% per employee and unit wage costs decreased by 2.9%. 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 1.2%.

In December, planning and building control authorities granted by 1.8% y-o-y less dwellings to be constructed. The approximate value of newly permitted constructions arrived at CZK 34.7 bn was almost by one half more on a year before. It expanded in all kinds of construction; construction permits of high-priced multifunctional centres, manufacturing halls and warehouses affected most this favourable development.

In 2006 according to preliminary data, the y-o-y volume of construction output enlarged by 6.6% in real terms, its dynamics like in the last year had been accelerating in the course of the year. Whilst in Q1 the y-o-y gain of construction volume was only 0.5%, in Q2 it was 6.2%, in Q3 arrived to 7.4% and in Q4 even 9.5%. Labour productivity increased by 6.3% in enterprises with 20+ employees, number of employees grew by 0.3%, an average wage reached CZK 20 304, increased nominally by 7.3% and by 4.7% in real terms. In comparison to 2005-year, unit wage costs rose by 0.9%.

External trade

In December, the y-o-y value of both exports and imports enlarged by 12.5% and 11.7%, 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 deficit of CZK 3.2 bn, i. e. less by CZK 0.8 bn than a year ago. Trade balance with EU member states was active by CZK 20.2 bn, with non-EU states passive by CZK 23.4 bn. Increase in trade surplus in machinery and transport equipment and decrease in trade deficit in mineral fuels, lubricants and related materials had a positive effect on balance y-o-y. According to preliminary data, m-o-m seasonally adjusted exports decreased by 0.5%, imports by 4.3%. Trends of both exports and imports came up.

In 2006, y-o-y exports and imports expanded by 14.6 % and 14.4%, respectively. The y-o-y surplus of the trade balance amounted to CZK 47.3 bn was the highest one in the history of the Czech Republic and was by CZK 8.7 bn higher than in 2005. In the course of individual quarters the surplus has been dropping from CZK 26.9 bn in Q1 to CZK 7.7bn in Q2 and to CZK 5.1 bn in Q3. In Q4 the balance increased to CZK 7.5 bn. Except Q2, the balance was always higher on a year before.

In accordance with preliminary recount of trade balance results in constant prices 2005, both the y-o-y 2006 exports expanded by 15.8% and imports by 15.0% in terms of real comparison, so that the surplus arrived approximately to CZK 58.4 bn. The y-o-y balance of trade improved almost by CZK 20 bn.


JANUARY 2007

Consumer prices ¹

In January, m-o-m consumer prices level increased by 1.0%; prices of goods by 0.8%, prices of services by 1.4%. This jump was brought on increase in regulated prices of housing, water, energy (prices of electricity by 7.9%, net rental by 4.5%, water supply by 6.6% and sewerage collection by 5.5%), charge on TV licences increased by 20% and social care services by 2.8% (as a result of changes in the law on provision of social services). Among market prices, growth of consumer prices level affected most the increase of prices of vegetables and non-alcoholic beverages, prices of food in canteens and restaurants. The y-o-y growth of consumer prices decelerated to 1.3% (less by 0.4 p.p. than in December 2006). The y-o-y growth in consumer prices (0.6 p.p.) affected markedly price changes in housing, water, energy and fuel. The second one influence on the price level growth (by 0.4 p.p.) had prices of foods and non-alcoholic beverages. Prices level of goods increased by 0.3% y-o-y, prices of services by 3.1%.

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 (2005-year), amounted to 2.4% in January, i. e. less by 0.1 p.p. than in December 2006.

In January 2007, the y-o-y increase of harmonised index of consumer prices reached 1.4% in the Czech Republic (according to a flash estimate, the HICP in Euro-zone was 1.9%).

Unemployment

The registered unemployment rate in January 2007 increased by 0.2 p. p. against December, which was less on a year before. At the end of the month reached 7.9%; it decreased by 1.3 p. p. as against end of January 2006. The females’ unemployment rate was 9.4%; the unemployment rate of males was 6.8%. Labour offices registered 465.5 thousand job applicants at the end of January, which is approx. more by 16.9 thousand people as against December 2006. Share in number of unemployed freshly graduated students and juveniles to the number of unemployed people were down and arrived at 6.7% (decrease by 0.4 p. p. as against last month); last year reached 7.2%. Number of job opportunities went up; in January increased to 97.9 thousand. Number of applicants per one job opportunity was 4.8 at the end of January; compared to January 2006, when it was 8.9 persons.

Harmonised unemployment rate ² has been published by Eurostat to obtain an international comparison, reached 7.1% in the Czech Republic in January and was by 1.0 p. p. lower than a year ago.


This press release was not edited for language.

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Notes:

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