Selected economy indicators - July 2006

The y-o-y gain of industrial production reached double-digit value in June again. Also the y-o-y volume of construction output expanded markedly. In spite of volume of imports grew faster than exports, the trade balance ended in a high surplus.
In July the y-o-y level of consumer prices increased by 0.4% m-o-m; by 2.9% y-o-y. The registered unemployment rate increased during the first holiday month, likewise in previous years.
JUNE 2006


Industry

In June the y-o-y volume industrial production reached 10.5% ¹. Favourable development in manufacturing of transport equipment (by 3.4 p.p., increase by 17.2%), manufacturing of basic metals, metallurgical and metalworking products (by 2.6 p. p., increase by 20.1%), and manufacturing of electrical and optical devices and appliances (by 2.2 p.p., increase by 18.4%) was recorded. The reverse effect had (both –0.2 p. p.) manufacturing of food and beverages, tobacco products and energy producing raw materials. The m-o-m seasonally adjusted industrial production decreased by 0.4%, the trend has concurrently been growing up by 0.8%.

In June sales in industry were higher by 10.8% (at constant prices), direct export sales increased by 11.9%. Industrial foreign-controlled enterprises increased its sales in industry by 17.8% and its share in total sales was 59.2%. Direct export sales there were up by 14.6%. Number of employees in industry increased (by 1.5%, i. e. by 17.2 thousand people) y-o-y; labour productivity (sales per employee) was 9.1% up. The y-o-y average monthly wage amounted to CZK 19 661 was up both nominally and really by 5.9% and 3.0%, respectively. Labour productivity grew faster and outstripped increase of average wages; unit wage costs decreased by 2.9%.

The y-o-y volume of new orders in selected industrial branches increased by 9.3% (at current prices) in July. Volume of new foreign orders enlarged by 5.2%.

In H1, volume of industrial production expanded by 11.9%, as against an equal period of the last year (in Q1 by 15.2%, in Q2 by 8.9%). In terms of real comparison sales in industry jumped by 12.5%, direct export sales were up by 12.2%. An average monthly wage increased nominally and really by 6.3% and 3.3%. Labour productivity went up by 10.4%, the y-o-y unit wage costs dropped by 3.7%.


Construction

In June the y-o-y volume of construction output was higher by 10.2% (at constant prices); and expanded for the second month with double-digit paces. All kinds of construction work added to that growth except for other construction work whose volume markedly lessened. Number of employees in construction enterprises (with 20+ employees) rose by 0.7% as against June 2005. The y-o-y average monthly wage reached CZK 20 428 and increased by 4.9% nominally and by 2.0 % in real terms. Labour productivity increased by 9.8% per employee, owing to unit wage costs dropped by 4.5%. In terms of real comparison the m-o-m seasonally adjusted construction outputs increased really by 0.2 %, the trends grew by 1.2% m-o-m.

In June, planning and building control authorities granted by 10.9% y-o-y less dwellings to be constructed. The approximate value of newly permitted dwellings arrived at CZK 26.4 bn was by 12.7% less on a year before. It was permitted 3 703 new dwellings, which is by 427 more than in June 2005.

In H1 according to preliminary data, the y-o-y volume of construction output enlarged by 4.3% in real terms, in Q1 grew by 0.5% only, in Q2 by 6.5% by now. In H1 labour productivity increased by 3.2% in enterprises with 20+ employees, an average wage increased nominally by 6.2% and by 3.2% in real terms. Unit wage costs rose by 2.9%.


External trade

In June the y-o-y volume of exports enlarged by 9.5% imports grew faster by 10.0% (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 8.9 bn, i. e. more by CZK 0.1 bn than a year ago. Trade balance with EU member states was active by CZK 31.2 bn, with non-EU states passive by CZK 22.3 bn. Trade in machinery and transport equipment, beverages, tobacco favourably influenced the y-o-y figures; on the other hand trade balance deficit worsened in trade in mineral fuels. According to preliminary data, m-o-m seasonally adjusted exports and imports decreased by 1.9% and 1.7%, respectively. Trends of exports came up by 1.1%; those of imports by 0.4%.

In H1 both y-o-y exports and imports expanded by 12.9% and 13.8%, respectively. The y-o-y surplus of the trade balance amounted to CZK 35.1 bn was lower by CZK 2.8 bn on a year before. In Q1 volume of both exports and imports expanded by 17.5% and 18.2%, respectively; in Q2 by 8.7% and 9.8%. The trade balance surplus arrived at CZK 25.5 bn in Q1, in Q2 at 9.6 bn.


JULY 2006


Consumer prices

In July, m-o-m consumer prices increased by 0.4%. Prices of goods decreased by 0.1%, while prices of services increased by 1.4%. This rise was brought on increase in prices in holiday and culture (prices for package holidays) and public transport (automotive fuels and the introduction of the charge CZK 700 for a skilled aptitude test for car driving). The y-o-y growth of consumer prices accelerated to 2.9% from 2.8% last month. An acceleration of the price growth rate was recorded particularly for food and non-alcoholic beverages; a reducing effect had the fall in prices in transport and housing. Prices of goods increased by 2.8% y-o-y, prices of services by 3.3%. 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 2.6% in July that was by 0.1 p. p. more than in June.

In July 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 2.5%).


Unemployment

The registered unemployment rate increased in July 2006 m-o-m, likewise in previous years. It reached 7.9% at the end of the month what means an increase by 0.2 p. p. in comparison to June, in terms of y-o-y comparison it decreased by 0.9 p. p. The females’ unemployment rate was 10.0%; the unemployment rate of males was 6.3%. Labour offices registered 458.3 thousand job applicants at the end of June, which is approx. by 7.2 thousand people more as against June 2006. Share in number of unemployed freshly graduated students and juveniles to the total number of unemployed people went up to 6.0% (increase by 0.5 p. p. as against last month); last year reached 6.2%. Number of job opportunities has constantly been rising; number of applicants per one job opportunity was 5.2 at the end of July; at the end of July 2005 it was 8.8 persons.


Harmonised unemployment rate 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
has been published by Eurostat to obtain an international comparison, reached 7.1 % in the Czech Republic in July and was by 0.6 p. p. lower than a year ago.


This press release was not edited for language.
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¹ Starting January 2006 the IPI results are being processed in accordance with a new methodology had been published in Press Release dated March 10, 2006.

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