Czech's industry grows modestly while construction surges due to EU funds

Following the strong June's increase, the industrial production added only 0.1% mom (SA), resulting into a slowdown from 8.1% yoy to 4.7%. The yoy figure is also affected by lower number of working days as July 2014 had one more working day. 

After calendar adjustments, the industrial production still maintains solid dynamics of 5.2% very close to June's 5.4%. A very similar story holds for the external trade which should record a surplus of CZK 9.6bn after June's 17.8bn, but in after removing the calendar effects the external trade surplus should stay slightly above average of this year. 

"The real economy is doing well this year benefiting from undervalued EUR/CZK and low interest rates. Another increase is to be visible in the construction output. It benefits from the inflow of the EU funds which are spent on the infrastructural building. Construction should have add 12.4% yoy in July", says Societe Generale.