Czech industrial production continued to grow for the seventh month in June, but at the slowest pace in since February, official data showed Friday. At the same time, retail sales grew for the second straight month, exceeding economists' forecasts.
Industrial output increased 9.7% year-on-year in June, much slower than the 16.9% growth recorded in May, the Czech Statistical Office said. The annual increase fell short of expectations for a 10.3% increase. On a seasonally adjusted basis, output rose 9.2% year-on-year and 0.7% month-on-month. In the second quarter, industrial production rose 12.3% over last year.
The statistical agency said the industrial output growth was led by higher production of motor vehicles, trailers and semi-trailers as well as fabricated metal products and manufacture of computer, electronic and optical products. Meanwhile, there was a steep decline in manufacture of furniture and food products.
The value of new orders in selected industries increased 12.3% annually in June, with a 6.4% rise in non-domestic new orders. The average registered number of employees in industrial enterprises fell 3.4% year-on-year in June, whereas their average monthly nominal wage rose 4.3% annually to CZK 24,562.
Separately, the statistical office reported that in June, the construction output was 4.7% lower than in the same period last year. Compared to May, construction output was down a seasonally-adjusted 0.4%. In the second quarter, construction output fell 6.3% on an annual basis.
In another release, the statistical agency revealed that retail sales, that included sales in automotive fuels, recorded a strong annual growth in June, defying expectations. The growth was mainly supported by robust growth in vehicle sales.
Retail sales, including automotive segment, rose 3.1% month-on-month in June, while sales were up 5.2% annually, after adjusting to seasonal variations. On a non-adjusted basis, retail sales increased 6.6% year-on-year, faster than the 3.1% growth in May. Meanwhile, economists had expected growth to slow to 1.4%.
Sales and repair of motor vehicles were up a seasonally adjusted 6.7% month-on-month in June, and grew 17% in the year-on-year comparison. Similarly, seasonally non-adjusted sales, maintenance and repair of motor vehicles and motorcycles increased 18.7% annually, of which the sale of motor vehicles rose 22.1% and maintenance and repair of motor vehicles slipped 0.5%.
Furthermore, sales of non-food goods recorded the highest increase since March 2009. Total sales rose 0.5% during the first half of the year.
Separate data from the statistical office showed that the trade surplus narrowed for a third successive month in June with imports growing much faster than exports. Trade surplus unexpectedly shrunk to CZK10.4 billion in June from a revised CZK 12.07 billion in May. Economists were looking for a higher surplus of CZK 18.5 billion.
The latest figure was smaller than the CZK 20.3 billion recorded last year. During the second quarter, the country recorded a surplus of CZK 37.20 billion compared to CZK 46.03 billion in the first quarter.
Exports rose 19.7% year-on-year in June compared to a revised 24.2% growth in the previous month. Imports increased 28% year-on-year, following a 25.9% gain in May. Exports have been growing since October last year. On a seasonally adjusted basis, exports and imports grew 3.8% and 5.7%, respectively from May.
The Czech economy's recovery from the recession has been only modest, the central bank observed yesterday, after maintaining its key policy rate at 0.75% for the second straight rate-setting session amid easing inflationary pressures. "More robust economic growth can be expected only in 2011-2012," the bank board said.
However, the new center-right government has vowed to cut the budget gap and bring in tight consolidation measures. The economy expanded 1.1% annually in the first quarter after suffering four quarters of contractions.
The Czech National Bank expects the economy to grow 1.6% this year and 1.8% in 2011. Growth will accelerate further to 2.9% in 2012, the bank said. However, the central bank noted that the current exchange rate developments and fiscal consolidation measures posed downside risks to current forecasts, while commodity price developments remained favorable.
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