Czech retail sales likely recovered in May on robust consumer spending

Czech Republic’s retail sales are likely to have rebounded in May with the help of solid consumer spending. According to a Societe Generale research report, the nation’s retail sales are expected to have grown 7.7 percent year-on-year. Household consumption in the Czech Republic has been boosted in the past few months, thanks to declining unemployment, increasing wages, strong confidence and generous fiscal policy.

Meanwhile, the automotive sector is expected to have driven the country’s industrial production in May. Output is likely to have increased sharply in the month, noted Societe Generale. The expected rise is partially because of calendar factors (there were three additional working days in May 2016 as compared to May 2015). This is expected to have stimulated other sectors as well.

However, on a month-on-month basis, a minor correction is expected. Industrial output is likely to have dropped 0.6 percent on sequential basis, given the shutdown of a major refinery. Meanwhile, construction is likely to have rebounded post its sharp decline in April. Construction activity is likely to have grown 1.2 percent on sequential basis. This is expected to have decelerated the year-on-year decline in the construction sector to 10.5 percent. Construction has been mainly impacted by a lack of infrastructure investment.