Czech Republic’s manufacturing business conditions recover in September

Manufacturing business conditions in the Czech Republic rebounded in September, signalled by the latest PMI survey data. The headline Markit Czech Republic manufacturing PMI rose to 52 in September from 50.1 in August, hinting at a strong overall improvement in operating conditions during the end of the third quarter and the best performance of the sector since May. All the five of its components saw the upward movement in the month. However, the recent figure continued to stay below the long-run survey trend level of 52.9.

The country’s manufacturing new orders increased in September. It followed a two-month sequence of decline. However, the pace of growth was just moderate and weaker than the long-run survey average. The overall rise showed improving domestic demand as new export business was widely unchanged since August. Several companies recorded that weaker German demand was a drag on overall international business.

Meanwhile, increase in new orders led to a rapid rise in output in September after marginally expanding in August. Production increased at the most solid pace since April, although it remained softer than the historic survey average. Backlogs of work expanded at the most rapid pace in four months. Manufacturers continued to increase workforces in the month. Job creation expanded for the 41st consecutive month. Furthermore, the pace of growth accelerated to the highest since May, noted Markit.

Meanwhile, purchasing activity expanded for the first time in three months in September. However, the pace of growth was mild and stocks of purchases continued to fall, although at a slower pace. Manufacturing input prices increased for the fifth straight month in September. It rose at the most solid pace since July 2015.