Selected economy indicators - June 2007

The y-o-y volume of both industrial production and construction slowed down in May. Growth paces of exports outstripped that of imports again, the May trade balance ended in a record-breaking surplus.
In June, the y-o-y level of consumer prices was higher compared to May, also the y-o-y growth of prices slightly accelerated. The registered unemployment rate has ceaselessly been decreasing since the end of January. 
MAY 2007
 
Industry
 
In May, the y-o-y volume of industrial production enlarged by 7.5%, after seasonal adjustment by 7.9%. Compared to preceding four months, paces of growth lessened. In total, manufacturing of electrical and optical appliances supported this growth with 2.1 p. p. (growth in the branch by 16.7%), manufacturing of means of transport and equipment by 1.8 p. p. (growth in the branch by 8.7%), by next 1.2 p. p. manufacturing and servicing of machinery and equipment (growth by 18.4%). On the other hand, the volume of production dropped in manufacturing of basic metals and metallurgical products, manufacturing of coke, refining of petrol and mining of energy producing raw materials. The m-o-m seasonally adjusted industrial production increased by 0.1%; the trend has been growing up by 0.6%.
 
In May, sales in industry were higher by 8.6% in terms of real comparison y-o-y, after seasonal adjustment by 9.2%. Direct export sales increased by 12.0%. Industrial foreign-controlled enterprises increased its sales in industry by 11.9% and direct export sales by 11.9%. Its share in total sales was 60.4% at current prices; in May 2006 it was 58.7%. 
 
Number of employees ¹ in industry increased by 2.1%, (i. e. by 24.0 thousand people) y-o-y; their y-o-y average monthly wage amounted to CZK 21 710 in May was up both nominally and really by 7.2% and 4.7%, respectively. Labour productivity was up by 5.8%.
 
The y-o-y volume of new orders in selected industrial branches enlarged, its y-o-y value increased by 0.5% in May, value of new foreign orders enlarged by 10.1%.  Low gain of new orders was affected by a high comparative basis last year, especially in the branch of other means of transport manufacturing.
 
In January to May, as against the equal period of 2006, the volume of industrial production enlarged by 11.2%. Sales in industry enlarged by 12.2% in real terms, direct export sales jumped by 17.6%. Number of employees in industry increased by 2.3%, an average monthly wage increased nominally by 8.0% really by 6.0%. Labour productivity grew by 8.9%.
 
Construction
 
In May, the y-o-y volume of construction output was higher by 1.4% (at constant prices), after seasonal adjustment by 2.9%. A drop of work on structural engineering brought about a slowdown of the growth, compared to preceding months; paces of growth of work on building construction was constantly double-digit. An intensive construction of shopping centres, logistic malls and housings continued. In construction enterprises (with 20+ employees), volume of new constructions, reconstructions and modernization in building construction (by 6.9 p. p.) contributed this y-o-y growth most favourably. The y-o-y volume of construction work abroad enlarged by more than 40% and contributed to this growth by 1.1 p. p. Structural engineering had an adverse effect (- 5.8 p.p.). In terms of real comparison the m-o-m seasonally adjusted construction outputs decreased really by 1.5% in April, the m-o-m trends drop by 0.5%.
 
Number of employees ² in construction enterprises (with 20+ employees) went down by 1.8% as against May 2006. The y-o-y average monthly wage reached CZK 22 559 and increased nominally by 9.2% and by 6.6 % in real terms. Labour productivity per employee increased by 2.7% and unit wage costs increased by 6.3%.
 
In May, planning and building control authorities granted by 18.2% y-o-y less construction permissions to be constructed. The approximate value of newly permitted constructions arrived at CZK 25.6 bn was less by one half on a year before. A high value of constructions permitted in May 2006 affected especially modernization and reconstruction in power engineering and high ways construction. Planning and building authorities permitted 3 535 new dwellings, which was by 8.3% less than in May 2006.
 
In January to May extraordinarily favourable meteorological conditions during first months of this year markedly affected the performance in construction. In total, the y-o-y construction output was by 18.1% higher, building construction and construction abroad most supported this favourable growth. An average registered number of employees ² in construction enterprises (with 20 + employees) dropped by 0.6%; so labour productivity per employee increased in such enterprises by 17.7%. An average monthly wage increased nominally and really by 11.7% and 9.6%, respectively. Number of permissions to be constructed granted by planning and building control authorities as well as estimated value of permitted constructions were almost consistent with the January to May 2006 value.
 
External trade
 
In May, the y-o-y value of both exports and imports enlarged by 12.8% and 10.3%, 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 6.9 bn, which represents the y-o-y improvement by CZK 4.7 bn. Since 2004 the surplus has been a characteristic trait of the May trade balance, this year was the highest one of May surpluses. Trade balance with EU 27 member states was active by CZK 33.0 bn, with non-EU 27 states passive by CZK 26.1 bn. Increase of trade balance in trade of mineral fuels and industrial consumer goods had a positive effect on trade balance, on the other hand worsening of balance in semi-finished product and materials trade had a negative effect. According to preliminary data, m-o-m seasonally adjusted exports decreased by 0.6%, and imports increased by 0.9%. Trends of exports dropped by 0.3%; trends of imports came up by 0.7%.
 
In January to May, volume of both exports and imports enlarged by 16.4% and 14.7%, respectively. The y-o-y trade balance surplus amounted to CZK 44.4 bn was higher by CZK 18.3 bn.
 
 
JUNE 2007
 
Consumer prices ³
 
In June, m-o-m consumer prices level increased by 0.3%; prices of goods by 0.3%, prices of services by 0.4%. This jump was brought on further increase in prices of tobacco products (by 2.1%) and automotive fuel (1.3%). Prices of holiday stays with full services, accommodation services, solid fuel and net rental in housings with controlled rental also went up by above-average paces. The y-o-y growth of consumer prices accelerated to 2.5% (more by 0.1 p.p. than in May 2007). The y-o-y growth in consumer prices again affected most prices development in alcoholic drinks and tobacco, then housing, water, energy and fuel (net rental in housings with controlled rental increased by 12.0%), and food and non-alcoholic drinks. In total, prices level of goods increased by 2.1% y-o-y, prices of services by 3.0%. The y-o-y consumer prices increased in Q1 by 1.5%, in Q2 by 2.4%.
 
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 2.1% in June, so the same like in May.
 
In June 2007, the y-o-y increase of harmonised index of consumer prices reached 2.6% in the Czech Republic (according to a flash estimate of Eurostat, the HICP in Euro-zone was 1.9%).
 
Unemployment
 
The registered unemployment rate in June 2007, decreased by 0.1 p. p., as against May. At the end of the month the registered unemployment rate reached 6.3%; it decreased by 1.4 p. p. as against end of June 2006. The females’ unemployment rate was 8.0%; the unemployment rate of males was 5.0%. Labour offices registered 370.8 thousand job applicants at the end of June, which is approx. less by 11.8 thousand people as against last month. As against end of June 2006 it declined markedly by considerable 17.8%; it was lower last time in November 1998. Number of unemployed freshly graduated students and juveniles has been dropping faster and its share in total number of unemployed people went down by 0.6 p.p. to 5.0%, last year arrived to 5.5%. Number of job opportunities went up again to record-breaking level of 123.3 thousand. Number of applicants per one job opportunity was 3.0 at the end of June; compared to June 2006, when it was 5.3 persons.
 
In Q1, the average registered unemployment rate arrived to 7.7%, in Q2 amounted to 6.6%.
 
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 salary and labour productivity also reflects this arrangement. The second mentioned indicator comprises also number of agency workers that 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 as well as foreigners working in construction are not involved into average registration number of employees
³ 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.

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