Czech Republic’s industrial sector likely to expand at decent rate again

Developments outside of Czech Republic and forward-looking indicators hint that the weakness in industrial output seen at the turn of 2016 has ended and that the industry is expected to grow at decent rate again, according to Societe Generale. Automotive sector is mainly driving the positive outlook. Industrial output is likely to accelerate later in 2016 as the nation’s biggest nuclear power plant will resume production and operations will be restarted at one of the main refineries, added Societe Generale.

However, the growth in industrial production is expected to be impeded by a decline in investment activity. The industry’s brief slowdown is not seen in labor market, and the situation of consumers has improved continually. Hence retail sales are likely to have grown rapidly by 7.4% y/y in February, noted Societe Generale.