Selected economy indicators - October 2006

The y-o-y growth of both, industrial production and volume of construction output slackened in September. Volume of exports grew faster than imports, the trade balance deficit ended in surplus again, after two months of its deficit.
In October, the y-o-y level of consumer prices decreased by 0.5% m-o-m; its y-o-y growth markedly decelerated over the second month. The registered unemployment rate dropped m-o-m.
SEPTEMBER 2006

Industry

In September the y-o-y volume industrial production reached 5.8%, after working days adjustment it was by 7.6%. In September was less one working day on a year before. Favourable development in manufacturing of means of transport and equipment (by 2.0 p. p. increase by 10.5%), manufacture of electrical and optical devices and appliances (by 1.8 p.p., increase by 13.0%) and manufacture and servicing of machinery and machinery equipment (by 1.0 p. p., increase by 15.2%) was recorded. The reverse effect had manufacture of food products, beverages and tobacco products and so by 9.8%. The m-o-m seasonally adjusted industrial production increased by 1.6%, the trend has concurrently been growing up by 0.5%.

In September sales in industry were higher by 6.1% (at constant prices), direct export sales increased by 9.1%. Industrial foreign-controlled enterprises increased its sales in industry by 11.8% and its share in total sales was 59.6% at current prices. Direct export sales there were up by 11.7%.

Number of employees in industry increased (by 1.2%, i. e. by 13.4 thousand people) y-o-y; labour productivity (sales per employee) was by 4.8% up. The y-o-y average monthly wage amounted to CZK 18 758 was up both nominally and really by 4.5% and 1.8 %, respectively. Labour productivity grew lower than increase of average wages; therefore unit wage costs decreased by 0.3%.

The y-o-y value of new orders in selected industrial branches increased by 8.9% (at current prices) in September. Value of new foreign orders enlarged by 6.3%.

In Q1 to Q3, volume of industrial production expanded by 10.5%, as against an equal period of the last year; the growth over quarters was as follows: 14.9%, 8.7%, 8.3%. In terms of real comparison sales in industry jumped by 10.9%, direct export sales were up by 11.3%. By increased number of employees in industry an average monthly wage enlarged nominally and really by 6.0% and 3.0%. Labour productivity went up by 9.2%, the y-o-y unit wage costs dropped by 2.9%.

Construction

In September the y-o-y volume of construction output was higher by 4.1%, after working days adjustment by 5.8% (at constant prices). In construction enterprises (with 20+ employees), volume of new constructions, reconstructions and modernization in civil engineering (by 5.9 p. p.) and work on maintenance and reparation (0.8 p. p.) affected this growth most favourably. Number of employees in construction enterprises (with 20+ employees) dropped by 0.5% as against September 2005. The y-o-y average monthly wage reached CZK 20 765 and increased nominally by 6.9% and by 4.1 % in real terms. Labour productivity increased by 4.5% per employee, owing to unit wage costs increased by 2.3%. In terms of real comparison the m-o-m seasonally adjusted construction outputs increased really by 0.6 %, the m-o-m trends grew by 0.7%.

In September, planning and building control authorities granted by 6.8% y-o-y less dwellings to be constructed. The approximate value of newly permitted constructions arrived at CZK 31.9 bn was by 10.9% more on a year before. It expanded most in new constructions of non-residential buildings; building control authorities permitted construction of large administrative buildings, warehouses and industrial halls. On the contrary, the value of newly permitted environmental constructions went down most. It was permitted 4 308 new dwellings, which is by 411 less than in September 2005.

In January to September according to preliminary data, the y-o-y volume of construction output enlarged by 5.4% in real terms. Whilst in Q1 expanded by 0.6% only; in Q2 it was by 6.2% up and in Q3 rose by 7.4%. Labour productivity increased by 4.8% in enterprises with 20+ employees, number of employees grew by 0.6%, an average wage increased nominally by 6.8% and by 3.8% in real terms. Unit wage costs rose by 1.9%.

External trade

In September the y-o-y volume of both exports and imports enlarged by 9.4% and 8.4%, respectively (all at current prices). The monthly volume of exports was the second largest in history of the Czech Republic. Due to the appreciation of the koruna against EUR and USD exports and imports rose faster in terms of both euros and dollars. After a deficit during two summer holidays months the trade balance ended in a surplus of CZK 7.5 bn, i. e. more by CZK 2.2 bn than a year ago. Trade balance with EU member states was active by CZK 32.1 bn, with non-EU states passive by CZK 24.6 bn. Trade in machinery and transport equipment, semi-manufactured goods and materials 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 increased by 3.1% whilst imports dropped by 0.7%. Trends of both exports and imports came up.

In January to September y-o-y exports and imports expanded by 13.1 % and 13.2%, respectively. The y-o-y surplus of the trade balance amounted to CZK 41.4 bn was higher by CZK 4.0 bn on a year before. Like in previous years, in this year the surplus diminished gradually; from CZK 27.5 bn in Q1 to CZK 9.7 bn in Q2 and to CZK 4.2 bn in Q3. Whilst the surpluses were higher in Q1 and Q3 as against last year, on the contrary, in Q2 were lower.


OCTOBER 2006

Consumer prices

In October, m-o-m consumer prices decreased by 0.5%. Prices of goods decreased by 0.8%, prices of services by 0.1%. This drop was brought on decrease in prices of natural gas, automotive fuel and foods. The y-o-y growth of consumer prices decelerated to 1.3% from 2.7% in September and 3.1% in August. The y-o-y growth in consumer prices affected markedly price changes in housing, water, energy and fuel (by 1.1 p.p.), then prices fluctuation of foods and non-alcoholic beverages, hotels and restaurants (all 0.2 p.p.). Prices of goods increased by 0.3% y-o-y, prices of services by 3.0%.

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 2.7% in October that was by 0.1 p. p. less than in September. During last 9 months has constantly been growing.

In October 2006, the y-o-y increase of harmonised index of consumer prices reached 0.8% in the Czech Republic (according to a flash estimate, the HICP in Euro-zone was 1.6%).

Unemployment

The registered unemployment rate in October 2006 decreased by 0.4 p. p., as against September, was higher fall than last year. At the end of the month reached 7.4%; it decreased by 1.1 p. p. as against end of October 2005. The females’ unemployment rate was 9.3%; the unemployment rate of males was 6.0%. Labour offices registered 439.8 thousand job applicants at the end of October, which is approx. less by 14.4 thousand people as against September 2006. Share in number of unemployed freshly graduated students and juveniles to the total number of unemployed people were down and arrived at 8.6% (decrease by 0.6 p. p. as against last month); last year reached 8.8%. Number of job opportunities has constantly been rising; in October exceeded 100 thousand. Number of applicants per one job opportunity was 4.3 at the end of October; compared to October 2005, when it was 8.9 persons.

Harmonised unemployment rate ¹ has been published by Eurostat to obtain an international comparison, reached 6.8% in the Czech Republic in October and was by 0.9 p. p. lower than a year ago.


This press release was not edited for language.

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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

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