Selected economy indicators - January, February 2008

The y-o-y growth of industrial production volume slowed down in December. Volume of construction output in December rose due to work abroad and structural engineering. By decelerated growth volume of exports rose faster than imports, the trade balance ended in the smallest December deficit. In December was less one working day, as against last year.

In 2007compared to 2006 industrial production volume enlarged by 8.2%, construction output by 6.7% and the trade balance surplus amounted to CZK 86.1 bn.

Due to increase in prices of housing, health care and foods, the January consumer prices level was considerably higher than in December, the y-o-y prices growth was the highest one since November 1998. The registered unemployment rate increased seasonally in January; however it was sizeably lower than by the end of January 2007.

DECEMBER 2007


Industry

In December, the y-o-y volume of industrial production was 2.9% (after working days adjustment the gain was 4.7%); this result also affected Christmas holidays. In total, manufacturing of means of transport and equipment supported this growth with 2.1 p.p. (growth in the branch by 11.3%), by next 1.6 p.p. manufacturing of electrical and optical appliances (growth in the branch by 9.4%), and by 0.6 p.p. production of coke, refining of petroleum (growth by 14.3%). The most negative impact (-0.6 p.p.) had a drop in production of food products and beverages, tobacco products by 7.2%, drops in production of chemicals, drugs, chemical fibres and production of basic metals, metallurgical and metal-working products had the same effect –0.4 p.p. The seasonally adjusted industrial production remained on the November level; the trends have been growing up by 0.4%.

In December, sales in industry were higher by 2.4% in terms of real comparison y-o-y (after working days adjustment by 4.2%), direct export sales increased by 1.9%. Industrial foreign-controlled enterprises increased its sales in industry by 4.5% and direct export sales by 3.2%. Its share in total sales was 56.0% at current prices; in December 2006 it was 55.8%.

An average number of employees ¹ in industry increased by 1.2%, (i. e. by 14.0 thousand people), their average monthly wage amounted to CZK 22 077 in December was up nominally by 5.2% and really by 0.2% lower than a year ago. Labour productivity in industry was up by 0.5%.

In December, the y-o-y value of new orders in selected industrial branches reduced by more than 2.2% , value of foreign orders by 2.4%.

In 2007, as against 2006, the volume of industrial production enlarged by 8.2%, the y-o-y growth in individual quarters has been dropping gradually from 11.6% in Q1 to 9.1% in Q2 and to 6.1% in Q3; in Q4 volume of industrial production increased by 6.2%. The annual growth paces was by 3.0 p.p. lower than in 2006. In terms of real comparison, sales in industry enlarged by 9.3%, direct export sales jumped by 13.0%. Number of employees in industry increased by 1.8%, an average monthly wage increased nominally by 7.4%, to CZK 21 048 and was really higher by 4.5%. The y-o-y labour productivity grew up by 6.6%.


Construction

In December, the y-o-y volume of construction output was by 5.6% higher (at constant prices), after working days adjustment by 7.2%. In construction enterprises (with 20+ employees) construction work affected the y-o-y gain by 5.5% especially work abroad (4.2 p.p.), and new constructions, reconstruction, modernization in structural engineering (effect by 4.0 p.p.), whilst the building construction effect was negative (-1.5 p.p.); also work on services and maintenance (effect –0.8 p.p.) and other work (effect –0.4 p.p.) went down.

The seasonally adjusted construction outputs were really by 0.7% higher m-o-m in December, the trends were up also by 0.7%.

Number of employees ² in construction enterprises (with 20+ employees) went down by 1.9% as against December 2006. The y-o-y average monthly wage reached CZK 23 538 and increased by 3.7%, and went down by 1.6% in real terms. Labour productivity per employee increased by 7.6% compared to December 2006 level.

In December, planning and building control authorities granted by 22.6% y-o-y less construction permissions to be constructed. Financially high-priced reparations, reconstructions and modernizations of motorways and highways affected the approximate value of permitted constructions; it arrived at CZK 36.4 bn and compared to December 2006 increased by 4.9%. Planning and building authorities permitted 3 994 new dwellings, which was less by 7.7% than in December 2006.

In 2007 construction output was in real terms by 6.7% higher than a year ago. Whilst in Q1 the y-o-y construction output enlarged by record-breaking 28.8%, in Q2 only by 3.5%, in Q3 dropped by 0.3%; in Q4 returned to the growth (5.3%). Although there was a quite different development of 2007-year in comparison to 2006-year, the annual gains were in both years identical. Number of employees in construction enterprises (with 20 + employees) dropped by 1.5%; so labour productivity per employee increased in such enterprises by 7.5%. An average monthly wage increased nominally and really by 7.9% and 5.0%, respectively. Whilst planning and building control authorities granted less by 13.3% y-o-y, orientation value of permitted dwellings reduced only by 0.9%.


External trade

In December, the y-o-y value of exports enlarged by 5.2%, imports by 3.6% (both in current prices), The rate of growth was the lowest since April 2006 in exports and since July 2005 in imports. Due to the appreciation of the Czech koruna against the EUR and especially against the USD, exports and imports rose faster in terms of dollars and euros than in Czech koruna. The trade balance ended in a deficit of CZK 1.1.bn was the smallest December deficit since 1993 and it was by CZK 2.6 bn better than a year ago. The trade balance with EU 27 member states was active by CZK 27.7 bn, with non-EU 27 states passive by CZK 28.8 bn. Increase in trade of machines and machinery products and means of transport, semi-finished products, materials and raw materials had a positive effect on trade balance. On the other hand worsening in trade of chemical products and mineral fuels, beverages and tobacco products had a negative effect on the trade balance. According to preliminary data, m-o-m seasonally adjusted exports enlarged by 0.7%, imports dropped by 5.7%. The trend component rose by 0.7% in exports and dropped by 0.3% in imports.

In 2007, volume of both exports and imports enlarged by 15.0% and 13.1% y-o-y. The y-o-y trade balance surplus amounted to CZK 86.1 bn more than twice as high as against 2006 year, in 2007 was by CZK 46.3 bn higher on a year ago. During individual quarters the surplus dropped from CZK 38.9bn in Q1 to CZK 17.4 bn in Q2 and to CZK 10.9 bn in Q3. The Q4 trade balance increased again to CZK 18.9 bn. In comparison to each quarter the trade balance was better on a year ago.

According to preliminary recalculations of the y-o-y external trade results to constant prices volume of exports enlarged really by 14.0%, and imports by 14.5%. The y-o-y trade balance worsened.



JANUARY 2008


Consumer prices

In January, m-o-m consumer prices level increased by 3.0%; prices of goods increased by 2.0%, prices of services by 4.8%. The m-o-m gain was the highest since January 1998. The rise in January affected decisively administrative measures, for instance an increase of controlled prices for housing, VAT taxes increase from 5% to 9% and regulatory fees in health care delivery. The y-o-y growth of consumer prices accelerated to 7.5% (by 2.1 p.p. more than in December 2007), and was the highest one since November 1998. The y-o-y development of prices level increase influenced most prices of housing, water, energy and fuel (2.2 p.p., prices growth by 8.7%), food and non-alcoholic drinks (2.0 p.p., prices growth by 12.0%), alcoholic drinks and tobacco (1.3 p.p., prices growth by 15.8%) and public transport (0.8 p.p., prices growth by 6.8%). Prices in health care delivery increased by one third. In total, prices of goods jumped by 7.7% and prices in services by 7.1%.

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 reached 3.4% in January and was by 0.6 p.p. higher than in December 2007.

In January 2008, the y-o-y increase of average harmonised index of consumer prices reached 7.9% in the Czech Republic (according to a flash estimate of Eurostat, the HICP in Euro-zone was 3.2%).


Unemployment

The registered unemployment rate in January 2008 increased by 0.1 p.p. as against December 2007 and arrived to 6.1% to the end of January. The females’ unemployment rate did not change and remained at 7.4%, the unemployment rate of males increased by 0.3% to 5.2%. As against end of January 2007 the registered unemployment rate was by 1.8 p.p. lower. Labour offices registered 364.5 thousand job applicants at the end of January and was by 9.7 thousand higher than a month ago, as against end of January 2007 number of job applicants reduced by more than one fifth. As against previous month, number of unemployed freshly graduated students and adolescents reduced, its share on the total number of unemployed people dropped by 0.4 p.p. to 6.0%, at the end of January 2007 reached 6.7%. Number of job opportunities jumped to the record-breaking number 145.9 thousand. Number of applicants per one job opportunity at the end of January was 2.5; compared to January 2007, when it was 4.8 persons.


This press release was not edited for language.

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¹ Starting January 2007, the Czech Statistical Office proceeded to publish data on number of people employed in the short-time statistics of industry. This new index comprises also persons working in sense of contract for work (outside employment) and other people who are engaged to work in a company but they are outside employment. Data have been recalculated to a full-time employment. Calculation of an average wage and a labour productivity also reflects this arrangement. The second mentioned indicator comprises also number of agency workers who are not involved into the total number of employees. The y-o-y data comparability is guaranteed.

² Employees working in construction enterprises through personnel agencies are not involved into average registration number of employees

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