Selected economy indicators - May 2006

The y-o-y volume of industrial production slackened its growth in comparison to the preceding months. The y-o-y volume of construction output lessened again so that it did not reach the last year level for first four months of this year. Volume of both exports and imports slowed down growth paces markedly, the trade balance ended in a slight surplus again. The performance of the economy was influenced by less two working days on a year before.

In May the y-o-y level of consumer prices increased by one-half percent. Total number of registered unemployed people has been diminishing for the fifth month, at the end of May dropped under 8 percent was at least when the current methodology is used (since July 2004).
APRIL 2006

Industry

In April the y-o-y volume industrial production reached 3.6% ¹ , (for the last time in March 2005 such a low growth was recorded). Industrial production increased after working days adjustment by 7.6% (in April were less two working days on a year before). Favourable development in manufacturing of transport equipment (by 2.9 p.p., increase by 16.1%), manufacturing of electrical and optical devices and appliances (by 0.8 p.p., increase by 7.3%) most contributed to this growth. Manufacturing of coke and refining of petrol went up coincidently by 0.7 p. p. (by 16.6%), manufacturing of basic metals, metallurgical and metalworking products (by +4.8%). On the other hand industrial production in more than one half of branches decreased, manufacture of chemicals and chemical products (by –0.6 p. p.) and manufacture of other non-metallic mineral products (by –0.4 p. p.) affected changes of the total industrial production most. The m-o-m seasonally adjusted industrial production decreased by 2.2%; the trend has concurrently been growing up.

In April sales in industry were higher by 3.4% (at constant prices), direct export sales decreased by 0.6%. Industrial foreign-controlled enterprises increased its sales in industry by 9.9%; its share in total sales was up by 58.5%. Direct export sales there were up by 1.2%. Number of employees in industry increased (by 1.7%, i. e. by 19.6 thousand people) y-o-y; labour productivity (sales per employee) was 1.6% up. The y-o-y average monthly wage amounted to CZK 18 523 was up both nominally and really by 5.1% and 2.2%, respectively. Labour productivity grew faster and outstripped increase of average wages. As a result unit wage costs increased by 3.4%.

The y-o-y volume of new orders in selected industrial branches increased by 13.5% in April. Volume of new foreign orders enlarged by 3.3% (at current prices).

In January to April volume of industrial production expanded by 12.2%, as against an equal period of the last year. In terms of real comparison sales in industry jumped by 12.7%, direct export sales were up by 11.6%. An average monthly wage increased nominally and really by 5.9% and 3.0%, respectively, under increased number of employees. Labour productivity went up by 10.3%, the y-o-y unit wage costs dropped by 4.0%.

Construction

In April the y-o-y volume of construction output was lower by 2.9% (at constant prices); in this year except March the performance in construction fell y-o-y. Construction output after working days adjustment decreased by 0.2% in April. All kinds of construction work added to those fall except for construction work (of weight not significant) performed abroad, which expanded almost by one quarter. Number of employees in construction enterprises (with 20+ employees) rose by 0.3%, as against April 2005. The y-o-y average monthly wage reached CZK 18 600 and increased by 1.8% nominally and fell by 1.0% in real terms. Labour productivity decreased by 3.0% per employee, owing to unit wage costs jumped by 4.9%. In terms of real comparison the m-o-m seasonally adjusted construction outputs decreased really by 1.3 %, the trends grew m-o-m.

In April planning and building control authorities granted by 10.8% y-o-y less dwellings to be constructed. The approximate value of newly permitted dwellings arrived at CZK 23.2 bn was by 7.6% less on a year before. It was permitted 3 529 new dwellings, which is by 611 more than in April 2005.

In January to April the y-o-y volume of construction output lessened by 0.6% in real terms. In enterprises with 20+ employees labour productivity dropped by 2.5%, an average wage increased nominally by 5.0% and by 2.1% in real terms. Unit wage costs rose by 7.7%.

External trade

In May the trade balance ended in an imperceptible surplus of CZK 0.2 bn, i. e. more by CZK 0.6 bn than a year ago. The y-o-y volume of both exports and imports enlarged by 3.0% and 2.6%, respectively ( at current prices) the lowest growth paces of both exports and imports since May 2005 and July 2005, respectively, were recorded. Trends of both exports and imports were among others influenced by smaller number of working days. Due to the appreciation of the koruna against EUR and USD exports and imports rose faster in terms of both euros and dollars. Trade balance with EU member states was active by CZK 22.6 bn, with non-EU states passive by CZK 22.4 bn. The y-o-y figures were favourably influenced by trade in machinery and transport equipment (+CZK 5.7 bn), on the other hand trade balance deficit worsened in trade in mineral fuels (deficit up by CZK 1.8 bn). According to preliminary data, m-o-m seasonally adjusted exports and imports lessened by 2.9% and 5.8%, respectively. Trends of exports came up by 0.1%; those of imports remained at the same level.

In January to April both exports and imports expanded by 13.7% and 13.9%, respectively. The y-o-y surplus of the trade balance amounted to CZK 25.6 bn was higher by CZK 1.8 bn.


MAY 2006

Consumer prices

In May, m-o-m consumer prices increased by 0.5%. Prices of goods increased by 0.2%, prices of services by 1.1%. This rise was brought on increase in prices of food and non-alcoholic beverages also due to the rise in lump fee for operation of residential telephone lines and prices of automotive fuels by 3.6%. Prices of alcoholic beverages and package holidays increased as well. In terms of y-o-y comparison, consumer prices accelerated to 3.1% (the biggest increase since October 2004) after the three previous successive months in which it constantly amounted to 2.8%. The biggest effect (2.0 percentage points) on y-o-y increase belonged to housing, water, electricity, gas and other fuels, where prices of natural gas increased by 30%, electricity by 9.0%, heat and hot water by 12.0%. The share of transport, postal services and telecommunication reached coincidently 0.4 percentage points. In total, prices of goods went up by 2.4%, prices of services by 4.5%. 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 2.4% in May that was by 0.1 p. p. more than in April.

In May 2006 the y-o-y increase of harmonised index of consumer prices reached 2.8% in the Czech Republic (according to a flash estimate, the HICP in Euro-zone was 2.5%).

Unemployment

The registered unemployment rate decreased in May 2006 m-o-m, likewise in previous years. It reached 7.9% at the end of the month what means a drop by 0.4 p. p. in comparison to April, in terms of y-o-y comparison it decreased by 0.7 p. p. The females’ unemployment rate was 9.6%; the unemployment rate of males was 6.6%. Labour offices registered 463.0 thousand job applicants at the end of May, which is approx. by 31.5 thousand people less as against May 2005 (the y-o-y biggest drop). Share in number of unemployed freshly graduated students and juveniles to the total number of unemployed people went down to 6.2% (fall by 0.6 p. p. as against last month); last year reached 6.6%. Number of applicants per one job opportunity was 5.7 at the end of may; at the end of May 2005 it was 8.7 persons, number of job opportunities has constantly been rising in this year.

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 May 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