Czech industrial production and construction down in January 2019

Czech industrial production and construction down in January 2019
Czech industrial production contracted by 1.1% and construction by 13.2% year-on-year in January 2019
By bne IntelliNews March 19, 2019

Both industrial production and construction have been weakening since beginning of this year. Industrial production contracted by 1.1% and construction by 13.2% year-on-year in January 2019, according to data by the Czech Statistics Office (CSO) published on March 15.

Seasonally adjusted industrial production fell by 1.3% month-on-month in January 2019, with the value of new orders increasing by 1.9 y/y.

Seasonally adjusted construction increased by 2.9% m/m, with approximate value of permitted constructions up by 17.3% y/y, mostly due to favourable weather conditions which “enabled construction workers to carry out all types of construction work without any limitation,” the Office reported.

A year-on-year decline in industry was caused mainly by production of motor vehicles, trailers and semi-trailers, which dropped by 6.9%. “The most significant fall was recorded in automotive industry caused by production shutdowns,” said the Head of the Office's Industry Statistics Department Iveta Danisova, the Czech News Agency (CNA) reported.

“The number of dwellings started in January 2019 grew by 15.3%, y/y, to reach 2,797 dwellings. The number of dwellings started in family houses decreased by 5.5% and that of dwellings started in multi-dwelling buildings soared by 67.1%. The number of completed dwellings jumped up by 28.2%, y/y, in January 2019 and was 2,753 dwellings,” the statistics data stated.

“It's just a picture of one month, from which we can't make long conclusions for this year, but at least it doesn't show any looming tragedy,” said CSOB analyst Petr Dufek, stressing that success of the domestic industry depends mainly on good development abroad. “Nevertheless, we expect a small but still positive result of the industry for this year,” he added.

According to the Czech Fund chief economist Lukas Kovanda, Czech industry will perform better this year than January figures show.

The analysts expect moderate growth also in construction this year. “Construction industry is still in relatively good condition. It has a solid supply of orders, which has not exhausted its capacity yet. On the other hand, it could be threatened by potential cuts if savings are to be searched, for example, in the area of ​​transport infrastructure investments,” said Dufek for the CNA.