Czech manufacturing activity dropped by 8% last year

The country reports a record foreign trade surplus in 2020

editor: REMIX NEWS
author: Czech News Agency

Manufacturing activity in the Czech Republic last year fell by 8 percent year-on-year, according to data published by the Czech Statistical Office (ČSÚ). That is the highest decline since the financial crisis in 2009, when industrial activity dropped by 13.6 percent.

Last year, Czechia’s industrial activity was mainly affected by the second quarter. From April to June, production in the country decreased by 23.5 percent. The decline slowed significantly in the third quarter, and industry already showed modest growth in the last quarter.

In 2020, only a few industries recorded year-on-year production growth.

“Growth was recorded by the pharmaceutical industry or the paper industry as well as other sectors, including companies manufacturing toys and hospital beds,” said Veronika Doležalová, head of the ČSÚ industry statistics department.

At the end of the year, manufacturing activity rose. In December, production increased by half a percent year-on-year.

“In December, the industrial production grew mainly thanks to the automotive sector. The production of plastic products and the chemical industry also prospered. On the contrary, manufacturing activity fell in the IT sector and engineering,” added Miroslav Novák, an analyst at the Akcenta financial company.

This year, analysts expect the manufacturing industry to return to growth, which, according to them, will probably not compensate for last year’s decline. For example, ING Bank analyst Jakub Seidler expects industrial production to grow by about 4 percent this year. Komerční Banka analyst Michal Brožka added that the manufacturing activity will be limited by issues with the supply of components, shortage of labor, and a fluctuation in foreign demand due to the pandemic situation.

However, foreign trade registered a record surplus last year, reaching almost 190 billion korunas (€7.38 billion). Compared to 2019, it increased by 44.3 billion korunas (€1.72 billion). The final months of 2020, in particular, contributed to the record surplus. However, both export and import decreased year-on-year.

Title image: A worker assembles a hospital bed, at the Linet factory in Slany, Czech Republic, Monday, Oct. 19, 2020. (AP Photo/Petr David Josek)


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