Industry and construction increased by more than nine percent in September

Prague - The domestic industry and construction thrived in September. According to data from the Czech Statistical Office, the year-on-year growth of industrial production accelerated to 9.6 percent after a decrease of 2.6 percent in August; construction production improved by 9.2 percent compared to last September after a decrease of 1.2 percent in August. The September industrial production results are a slight surprise for the market according to analysts, as industrial production has significantly slowed down in recent months.
    "The industrial results are very favorable this time, but excessive optimism is not warranted. One only needs to disregard the higher number of working days and look at the declining orders from industrial firms," responded ČSOB analyst Petr Dufek. Except for the chemical industry, metal manufacturers, and particularly the electronics sector, orders are only going in one direction, and that is down.
    A weakness in the published figures was also noted by Czech Savings Bank analyst Martin Lobotka, who pointed out the renewed decline in foreign orders. "The industry is visibly weakening; its fate in the future is in the hands of foreign demand due to its export orientation," he remarked.
    Data on the development of Czech construction according to Komerční Banka analyst Kamila Fialová suggests future production limitations related to the uncertain economic development as a result of the financial crisis. According to analysts, construction and modernization of infrastructure will continue to be the driving force of the sector in the next period.
    A stable inflow of money into infrastructure may also compensate for weaker results in commercial and residential project construction in the phase of economic slowdown, indicated analyst Petr Dufek from ČSOB.
    Conversely, the trend in the decline of building construction, which includes apartment construction, is likely to continue in the next period, says the CEO of the Union of Construction Entrepreneurs Miloslav Mašek.
    The Czech Statistical Office also announced results for residential construction today. In the third quarter of this year, construction began on 11,914 apartments, which is 5.3 percent less than in the same period of 2007. A total of 9,559 apartments were completed, which is 9.5 percent more than in last year's third quarter. There were 178,831 apartments under construction, with the number increasing by 1.1 percent year-on-year.
    Analysts do not view the year-on-year decline in the number of started apartments for the third quarter pessimistically. "Generally speaking, despite minor fluctuations, the market is growing in the long term - in the first three quarters of this year, the number of started, completed, and under-construction apartments increased compared to 2007," said analyst Ondřej from consulting company King Sturge to ČTK.
    The effects of potential financial difficulties have not yet shown a significant impact on construction, says spokesperson for the Ministry for Regional Development Jan Štoll. However, according to Novotný, a decline in residential construction could occur at the turn of this year and the next due to the crisis in global markets.