Czech industry grew 3.4 percent year-on-year

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Figures released by the Czech Statistics Office show that Czech industrial production was performing well in June, rising from 1.4 percent in May to 3.4 percent year-on-year.

Also the manufacturing industry accelerated, although it grew at a slower pace, up 7.5 percent after the May increase of 10.1 percent. Retail sales were slightly disappointing, growing by just 2.0 percent YoY, while the 2018 average growth rate was above 5 percent.

The growth of the industry was mainly supported by power industry and engineering. With regard to the development of contracts, analysts say the industry will also be doing well in the upcoming months. However, according to them, it will have to deal with the fact that it is hitting the cap of its capacity and lacking a workforce that is getting more expensive because of it. In June alone, the average gross monthly wage for workers in industrial enterprises with 50+ employees increased by 7.4 percent year-on-year.

According to analysts, construction figures confirm a rather favorable trend, especially for structural engineering, where production increased by 9.6 percent in June. Regarding building construction, it was 6.7 percent higher year-on-year.

Analysts appreciate the strengthening of housing construction, which contributes to slowing the rise in prices of new flats. On the other hand, the demand for flats will be hardly satisfied. According to Expobanka economist Jiří Schwarz, the increase of flat prices cannot be expected to stop, although the tightening of the conditions for mortgage loans by the Czech National Bank slows down the increase in their prices.

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