Selected economy indicators - October 2007

In September, the y-o-y volume of industrial production further decelerated, volume of construction output went down. After two months, a deficit of the trade balance returned to the surplus.
In October, level of consumer prices was higher than in September, the y-o-y prices growth was the highest one since January 2002. The m-o-m registered unemployment rate reduced in October. 
SEPTEMBER 2007
 
Industry
 
In September volume of industrial production decelerated to 1.2% (in August it was 5.5 %) was the lowest growth since March 2005. After working days adjustment the gain was 3.0%. In total, manufacturing of electrical and optical appliances supported this growth with 1.7 p.p. (growth in the branch by 11.3%), manufacturing of means of transport and equipment by 1.5 p. p. (growth in the branch by 7.5%), by next 1.0 p. p. manufacturing and servicing of machines and equipment (growth by 14.1%). Drop in production of coke, refining of petroleum by more than by one half had the most negative impact (2.0 p. p.). Manufacturing of basic metals, metallurgical and metalworking products, chemicals, drugs, chemical fibres dropped, too. The seasonally adjusted industrial production remained at the last month level; the trend has been growing by 0.2%.
 
In September, sales in industry were higher by 3.3% in terms of real comparison y-o-y (after working days adjustment by 5.0%), direct export sales increased by 6.6%. Industrial foreign-controlled enterprises increased its sales in industry by 6.9% and direct export sales by 8.2%. Its share in total sales was 61.4% at current prices; in September 2006 it was 59.5%. 
 
An average number of employees ¹ in industry increased by 1.4%, (i. e. by 15.6 thousand people) y-o-y; their y-o-y average monthly wage amounted to CZK 20 089 in September was up both nominally and really by 5.9% and 3.0 %, respectively. Labour productivity was up by 1.2%.
 
The y-o-y value of new orders in selected industrial branches enlarged by 9.8% in September, value of new foreign orders enlarged by 16.3%. 
 
In Q1 to Q3, as against the equal period of 2006, the volume of industrial production enlarged by 8.9%; in individual quarters the growth has been slowing down from 11.6% in Q1 to 9.1% in Q2 and 5.9% in Q3. In terms of real comparison, sales in industry enlarged by 10.2%, direct export sales jumped by 14.1 %. Number of employees in industry increased by 2.2%, an average monthly wage increased nominally by 7.7% and really by 5.4%. The y-o-y labour productivity grew by 7.1% nominally.
 
Construction
 
In September, after the growth in August, the y-o-y volume of construction output returned to a drop and m-o-m was by 1.8% lower (at constant prices), after working days adjustment by 0.3%. In construction enterprises (with 20+ employees) construction work affected the y-o-y drop by 2.1% new constructions, reconstruction, modernization in structural engineering (effect by  (–3.1 p.p.) and work on services and maintenance (-1.7 p. p.) and other work (-0.3 p. p.). On the contrary, building construction had a positive effect (by 1.8%), and work abroad (effect of 1.2%). The seasonally adjusted construction outputs were really by 0.6% lower m-o-m in September, the trends were up by 0.4% m-o-m.
 
Number of employees ² in construction enterprises (with 20+ employees) went down by 2.1% as against September 2006. The y-o-y average monthly wage reached CZK 21 742 and increased by 4.8% and by 1.9 % in real terms. Labour productivity per employee remained at the September 2006 level.
 
In September, planning and building control authorities granted by 14.0% y-o-y less construction permissions to be constructed. The approximate value of permitted constructions arrived at CZK 25.2 bn was less by more than one fifth. Planning and building authorities permitted 3 981 new dwellings, which was almost by 7.6% less than in September 2006.
 
In January to September construction output was in real terms by 7.4% higher than a year ago. Whilst in Q1 it increased by record-breaking 28.9%, in Q2 only by 3.5%, in Q3 dropped by 0.1%. Number of employees ² in construction enterprises (with 20 + employees) dropped by 1.3%; so labour productivity per employee increased in such enterprises by 7.9%. An average monthly wage increased nominally and really by 8.9% and 6.6%, respectively. Whilst planning and building control authorities granted less by 11.4% y-o-y, orientation value of permitted dwellings reduced only by 3.0%.
 
External trade
 
In September, the y-o-y value of exports enlarged by 11.0%, imports by 7.6%, which was the lowest gain in this year (all in current prices). Due to the appreciation of the Czech koruna against EUR and especially against USD, exports and imports rose faster in terms of dollars and euros than in Czech koruna. The trade balance ended in the record-breaking September surplus of CZK 14.4 bn, which was by CZK 7.0 bn more than a year ago. In this year was only the February surplus slightly higher. The trade balance with EU 27 member states was active by CZK 38.3 bn, with non-EU 27 states passive by CZK 23.9 bn. Increase in trade of machine and machinery products and means of transport and mineral fuels had a positive effect on trade balance, also a positive development was recorded in balance of trade of industrial consumer goods, raw materials, foods and living animals. On the other hand worsening in trade of semi-finished products and materials, and chemical products had a negative effect on the trade balance. According to preliminary data, m-o-m seasonally adjusted both exports increased by 5.3%, whilst imports dropped by 3.1%. Trends of exports increased by 1.2%; trends of imports came up by 0.1%.
 
In January to September, volume of both exports and imports enlarged by 15.9% and 14.0% y-o-y. The y-o-y trade balance surplus amounted to CZK 69.5 bn was higher by CZK 34.8 bn more than a year ago, which is more than twice. In previous years alike the surplus in individual quarters gradually decreased; in this year from CZK 36.1 bn in Q1 and CZK 20.3 bn in Q2 to CZK 13.0 bn in Q3. All surpluses stated were higher on a year before.
 
 
OCTOBER 2007
 
Consumer prices
 
In October, m-o-m consumer prices level increased by 0.6%; prices of goods increased by 1.0%, prices of services by 0.1%. This rise was brought on increase in prices of food and non-alcoholic drinks (prices of milk jumped by 14.8%. butter by 15.0%, flour by 11.9% and vegetables – cucumbers, tomatoes, peppers, squashes and pumpkins – by 32.1%) and housing (prices of gas went up by 4.7% and solid fuel by 5.2%). Prices of footwear and clothes also went up. The y-o-y growth of consumer prices accelerated to 4.0% (more by 1.2 p. p. than in September 2007) was the highest growth since January 2002. The y-o-y development of prices level increase influenced most prices of alcoholic drinks and tobacco, then in dwellings, water, energy, fuel (identically by 1.3 p. p.), food and non-alcoholic drinks (effect by 1.0 p. p.). In total, prices of goods increased by 4.6%, prices if services by 3.2%.
 
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, was by 2.2% higher in October, so that by 0.2 p. p. higher than in September.
 
In October 2007, the y-o-y increase of harmonised index of consumer prices reached 4.0% in the Czech Republic (according to a flash estimate of Eurostat, the HICP in Euro-zone was 2.6%).
 
Unemployment
 
The registered unemployment rate in October 2007 dropped by 0.4 p.p. as against September and to the end of the month arrived to 5.8%; the females’ unemployment rate was down faster (by 0.6 p.p.) to 7.3%, the unemployment rate of males only by 0.3 p.p. to 4.6%. As against the end of October 2006 was by 1.6 p. p. lower. Labour offices registered 348.8 thousand job applicants at the end of October, which is approx. less by 16.1 thousand people than a month ago. As against end of October 2006 number job applicants reduced by almost one fifth. After the September increase, number of unemployed freshly graduated students and adolescents started to reduce in October. Their share on the total of unemployed people as against last month dropped by 0.7 p.p. to 7.9%, and last year reached 8.6%. Number of job opportunities jumped again to the record-breaking level 143.5 thousand. Number of applicants per one job opportunity was 2.4 at the end of October; compared to October 2006, when it was 4.4 persons.
 
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 who 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 are not involved into average registration number of employees

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