Czech Industry Decreased by 5% Year-on-Year in September

Czech industrial production decreased by 5% year on year and by 1.8% month on month in September.

It is the third month of consecutive y/y decline. The value of new orders decreased by 5.2% y/y but increased by 3.4% m/m, the Czech Statistical Office (CZSO) reported.

Analysts quoted by Czech Television (CT) sounded alarm bells, pointing out that a disruption in supply chains in the car industry caused by damaging August floods in Slovenia quickened the September decline of Czech industry.

“Even though part of the weak figures is due to technical influence, drops in energy production and warmer weather, nothing can change the fact that the drop is registered in most sectors in the industry,” analyst of the Czech Banking Association Jakub Seidler was quoted as saying by CT.

The y/y decrease in industrial production was “most contributed to by electricity, gas, steam and air conditioning supply, manufacture of machinery and equipment, and by manufacture of other non-metallic mineral products,” commented Radek Matejka of CZSO.

Matejka concluded that “industry across all economic activities is confronted with a decrease in production.”

CZSO also highlighted that the result in the energy sector was influenced by planned shutdowns in power plants and by exceptionally warm weather. “A decreased demand from construction continued to influence the production of building materials and manufacture of plastic products for construction,” the CZSO noted.

Y/y production increased only in the manufacture of basic pharmaceutical products and pharmaceutical preparations, manufacture of beverages, and manufacture of wearing apparel and slightly also in other manufacturing.

Non-domestic new orders decreased by 1.5% y/y, and domestic new orders by 12.2%.

The decrease in the value of new orders “occurred in most of the surveyed economic activities,” Veronika Dolezalova of CZSO commented.

She added that “the biggest decrease was recorded in the manufacture of computer, electronic and optical products, manufacture of basic metals, and also by the manufacture of machinery and equipment.”

New orders increased only in the manufacture of basic pharmaceutical products and pharmaceutical preparations and in the manufacture of wearing apparel, while a slight increase was registered manufacture of motor vehicles, trailers and semi-trailers.