Selected economy indicators - September 2006

The y-o-y growth of both, industrial production and volume of construction output slackened in August. Volume of exports grew faster than imports, the trade balance deficit lessened, in comparison to August 2005.
In September the y-o-y level of consumer prices decreased by 0.7% m-o-m; its y-o-y growth markedly decelerated. Despite of higher number of unemployed freshly graduated students in September the registered unemployment rate dropped m-o-m.

AUGUST 2006

Industry

In August the y-o-y volume industrial production reached 7.4% ¹, in this year for the second time the gain was recorded in single figures only. It was partially caused by a shift of company holidays from July to August in some branches. Favourable development in manufacturing of electrical and optical devices and appliances (by 1.7 p.p., increase by 13.5%), manufacturing of basic metals, metallurgical and metalworking products (by 1.5 p.p., increase by 10.9%), manufacturing and repair of machinery and machinery equipment (by 1.2 p. p., increase by 19.6%) was recorded. The reverse effect had manufacture of food products, beverages, tobacco products, manufacture of leather and leather products, manufacturing of textile, textile products and clothing. The m-o-m seasonally adjusted industrial production decreased by 1.1%, the trend has concurrently been growing up by 0.4%.

In August sales in industry were higher by 6.9% (at constant prices), direct export sales increased by 8.3%. Industrial foreign-controlled enterprises increased its sales in industry by 13.0% and its share in total sales was 56.6%. Direct export sales there were up by 12.1%. Number of employees in industry increased (by 1.4%, i. e. by 15.4 thousand people) y-o-y; labour productivity (sales per employee) was by 5.4% up. The y-o-y average monthly wage amounted to CZK 19 054 was up both nominally and really by 5.5% and 2.3%, respectively. Labour productivity grew lower than increase of average wages; therefore unit wage costs increased by 0.1%.

The y-o-y value of new orders in selected industrial branches increased by 13.5% (at current prices) in August. Value of new foreign orders enlarged by 11.8%.

In January to August, volume of industrial production expanded by 11.3%, as against an equal period of the last year. In terms of real comparison sales in industry jumped by 11.6%, direct export sales were up by 11.8%. By increased number of employees in industry an average monthly wage enlarged nominally and really by 6.2% and 3.2%. Labour productivity went up by 9.9%, the y-o-y unit wage costs dropped by 3.4%.

Construction

In August the y-o-y volume of construction output was higher by 6.4% (at constant prices); whilst during last three months expanded by double-digit paces. All kinds of construction work added to that growth except for other construction work whose volume markedly lessened. In construction enterprises (with 20+ employees), volume of new constructions, reconstructions and modernization in civil engineering (by 5.3 p. p.) and work on maintenance and reparation (1.2 p. p.) affected this growth most favourably. Number of employees in construction enterprises (with 20+ employees) did not change as against August 2005. The y-o-y average monthly wage reached CZK 20 593 and increased nominally by 7.9% and by 4.7 % in real terms. Labour productivity increased by 6.3% per employee, owing to unit wage costs increased by 1.5%. In terms of real comparison the m-o-m seasonally adjusted construction outputs decreased really by 0.4 %, the m-o-m trends grew by 0.9%.

In August, planning and building control authorities granted by 5.6% y-o-y less dwellings to be constructed. The approximate value of newly permitted constructions arrived at CZK 36.4 bn was by 1.3% less on a year before especially due to drop in other constructions. On the contrary, the approximate value of newly permitted dwellings went up; construction of high-priced administrative buildings and industrial complexes was granted. It was permitted 4 270 new dwellings, which is by 104 more than in August 2005.

In January to August according to preliminary data, the y-o-y volume of construction output enlarged by 5.7% in real terms. Labour productivity increased by 4.9% in enterprises with 20+ employees, number of employees grew by 0.7%, an average wage increased nominally by 6.8% and by 3.8% in real terms. Unit wage costs rose by 1.8%.

External trade

In August the y-o-y volume of both exports and imports enlarged by 8.9% and 7.1%, 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 deficit of CZK 2.1 bn, i. e. less by CZK 2.4 bn than a year ago (last year the trade balance was extraordinary affected by import of Jas-Gripen fighters in 2005). Trade balance with EU member states was active by CZK 23.5 bn, with non-EU states passive by CZK 25.6 bn. Trade in machinery and transport equipment, beverages, tobacco 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 decreased by 1,4% whilst imports increased by 4.5%. Trends of exports came up by 1.4%; those of imports dropped by 0.1%.

In January to August y-o-y exports and imports expanded by 13.7 % and 13.9%, respectively. The y-o-y surplus of the trade balance amounted to CZK 33.9 bn was higher by CZK 1.7 bn on a year before.


SEPTEMBER 2006

Consumer prices

In September, m-o-m consumer prices decreased markedly by 0.7%. Prices of goods decreased by 0.1%, prices of services by 1.5%. This drop was brought on decrease in prices in holiday and culture (prices for both, domestic and foreign holiday stays), public transport (prices of automotive fuel) and foods (prices of fresh vegetables and fruits of mild climatic zone). The y-o-y growth of consumer prices decelerated to 2.7% from 3.1% last month. The y-o-y growth in consumer prices affected markedly (by 1.9 p.p.) price changes in housing, water, energy and fuel, then prices fluctuation of foods and non-alcoholic beverages (0.5 p.p.). Prices of goods increased by 2.2% y-o-y, prices of services by 3.5%. In Q1, consumer prices rose by 2.8% y-o-y, in Q2 and in Q3 by 2.9%. 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 2.8% in September that was by 0.1 p. p. more than in August.

In September 2006 the y-o-y increase of harmonised index of consumer prices reached 2.2% in the Czech Republic (according to a flash estimate, the HICP in Euro-zone was 1.8%).

Unemployment

The registered unemployment rate in September 2006 reached 7.8% at the end of the month; it decreased by 0.1 p. p. as against last month. In terms of y-o-y comparison the registered unemployment rate decreased by 1.0 p. p. The females’ unemployment rate was 9.8%; the unemployment rate of males was 6.3%. Labour offices registered 454.2 thousand job applicants at the end of September, which is approx. less by 4.5 thousand people as against August 2006. As usual in September share in number of unemployed freshly graduated students and juveniles to the total number of unemployed people went up and arrived at 9.2% (increase by 2.1 p. p. as against last month); last year reached 9.4%. Number of job opportunities has constantly been rising; number of applicants per one job opportunity was 4.7 at the end of September; compared to September 2005, it was 9.0 persons.

In Q1 an average registered unemployment rate was 9.0%, in Q2 8.2%, in Q3 7.9%.

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

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