Selected economy indicators - October 2005

SEPTEMBER 2005

Industry

A long-run enlargement in industrial production continued growing; it has constantly been proceeding for five years except two months. In September the y-o-y industrial production index reached 107.1 due to favourable development in manufacturing of transport equipment, manufacture of rubber and plastic products, manufacture of coke and petrol products. Decreases were recorded in manufacturing and supply of electricity, gas and water, mining and manufacturing of energy producing raw materials and other mineral resources. The m-o-m seasonally adjusted industrial production increased by 0.8%, the trend has concurrently been growing up.

In September sales in industry were higher by 9.5% y-o-y (at constant prices) direct export sales increased by 6.7%. Industrial foreign-controlled enterprises increased its sales in industry by 17.1% in real terms; direct export sales were up by 7.6%. Number of employees in industry dropped by 0.3% (i. e. by 3.4 thousand people) y-o-y, labour productivity (sales per employee) was 9.9% up. The y-o-y average monthly wage amounted to CZK 17 893 was up both nominally and really by 4.8% and 2.5%, respectively. Labour productivity grew faster and outstripped increase of average wages. As a result unit wage costs decreased by 4.6%.

The y-o-y volume of new orders in selected industrial branches increased by 7.7% in September. Volume of new foreign orders enlarged by 5.6%.

Q1 to Q3 industrial production enlarged by 5.7% compared to the equal period of the last year (in the course of individual quarters the development was as follows: 4.8%, 4.5%, 8.9%). Sales in industry rose by 7.6% in real terms, direct export sales were up by 10.6%. An average monthly nominal wage increased by 4.5% nominally and by 2.8% really, by a moderate employment growth in industry by 0.1%. As a result labour productivity grew by 7.5%, y-o-y unit wage costs dropped by 2.8%.

Construction

In the course of 2005 construction output speeded up its growth rate. In September was up by 9.5% y-o-y (at constant prices). The high growth of construction output was in particular affected by a quickly rising volume of construction work on civil engineering works (especially highways), partly on increasing size of construction work on housing construction. Number of employees in construction enterprises (with 20+ employees) rose by 5.1%, as against September 2004. The average monthly wage reached CZK 19 446 and increased by 6.6% nominally and by 4.3% in real terms. Lower growth of labour productivity (by 3.1%) had a negative impact on development of unit wage costs that jumped by 3.4%. In terms of real comparison the m-o-m seasonally adjusted construction outputs increased by 1.5 %, the trend increased its pace.

January to September the y-o-y construction output was up by 2.2% in real terms; in Q1 did not approach the last year level by 3.2%; in Q2 remained at the Q2 2004 level, in Q3 rose by 7.5%. Labour productivity dropped by 1.5% in construction enterprises with 20+ employees; the average monthly wage increased by 4.1% nominally and by 2.4% in real terms. As a result unit wage costs enlarged by 5.7%.

In September 2005 planning and building control authorities granted 14.296 dwellings to be constructed which was the highest number of dwellings newly permitted since July 1999 (4 719). The approximate value of newly permitted dwellings reached CZK 28.7 bn.

External trade

In terms of y-o-y comparison, in September volume of both exports and imports enlarged by 5.3% and 4.3% (at current prices). Due to the development of exchange rate of the koruna, external trade rose faster in terms of euros and dollars than in korunas. After the August deficit the trade balance in September ended in a surplus of CZK 4.0 bn (i. e. by CZK 1.6 bn more on a year before). Trade balance with EU member states was active by CZK 23.2 bn, with non-EU states passive by CZK 19.2 bn. The figures were favourably influenced by trade in machinery and transport equipment (+CZK 4.5 bn), on the other hand trade balance deficit worsened in trade in mineral fuels and chemical products (deficit up by CZK 3.8 bn). According to preliminary data, m-o-m seasonally adjusted exports and imports shrunk by 1.0% and 1.6%, respectively.

January to September, in terms of y-o-y comparison both exports and imports jumped by 8.6% and 3.8%. The trade balance surplus reached CZK 45.3 bn, in comparison to the deficit amounted to CZK 15.4 bn had been attained in the equal period of last year. In the course of quarters surplus gradually decreased from CZK 26.8 bn in Q1 to CZK 15.2 bn in Q2 and in Q3 reached CZK 3.3 bn.

OCTOBER 2005

Consumer prices

In October, m-o-m consumer prices increased by 0.9%; prices of goods went up by 1.1%, prices of services by 0.4% that has been the highest increase since January 2004. This prices boost was influenced by an increase in administratively affected prices by 3.1%, while market prices remained stable in general. Prices in housing, mainly prices of natural gas (by + 17.4%) and supply of heat (by + 3.2%) increased most. Prices in recreation and culture also increased, especially fees for TV (by 33.3%) and broadcasting (by 21.6%). A slight increase in prices of food and non-alcoholic beverages on one side and a drop in prices of automotive fuel on the other resulted in a stability of market prices. The y-o-y rise in consumer prices accelerated to 2.6% that was the highest growth in this year. Prices in housing (mainly prices of water, energy and natural gas) and prices in recreation and culture most influenced rise in prices. Rise of prices level in transport lessened. Prices in food and non-alcoholic beverages jumped by 0.3%. In terms of y-o-y comparison, prices of goods increased by 1.9%, prices of services were higher by 3.8%. 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 2.0% in October alike in September.

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

Unemployment

The registered unemployment rate according to the current methodology reached 8.5% at the end of October and decreased by 0.3 p. p. as against last month. In terms of y-o-y comparison it decreased by 0.4 p. p. The females’ unemployment rate was 10.4%; the unemployment rate of males was 7.0%. Labour offices registered 491.9 thousand job applicants at the end of October, which is approx. by 25.9 thousand people less as against last month. There were 459.9 thousand of unemployed job applicants being able to take a job immediately, which was less by 20.0 thousand of persons as against October 2004. Share in number of unemployed freshly graduated students to the total number of unemployed people went down to 8.8% (fall by 0.6 p. p.); however last year it reached 10.2%. Number of applicants per one job opportunity was 8.9 at the end of October; at the end of October 2004 it was 10.6.

Harmonised unemployment rate ¹ has been calculated by Eurostat to obtain an international comparison, reached 7.9% in the Czech Republic in October and was by 0.3 p. p. lower than a year ago.

_______________

¹ 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

This press release was not edited for language.

---