Construction output increased by 0.1%

Prague - Construction production at constant prices increased by 0.1 percent year-on-year, after dropping by 2.1 percent in May. The decline in building construction continued, while engineering construction saw growth. This was announced today by the Czech Statistical Office.
    After adjusting for the influence of the number of working days, industrial production fell by 14.3 percent. "June 2009 had one more working day compared to the same month of the previous year. After adjusting for seasonal influences, including the effect of the number of working days, industrial production was 2.9 percent higher month-on-month," stated the Czech Statistical Office.
    According to Raiffeisenbank analyst Michal Brožka, Czech industry may have actually found its bottom and is beginning to recover. Such a strong month-on-month increase was last recorded at the beginning of 2007, he reminded. ČSOB analyst Petr Dufek described the overall result of the industry under current recession conditions as slightly positive. "This is the first figure in more than half a year that indicates a turnaround or at least stabilization," he stated.
    However, economists believe it is still too early for optimism. Unemployment is still rising in the industry, and there are now 13 percent fewer people working in it than last year. Domestic orders are weak. Analysts estimate a double-digit year-on-year decline in the industry. "July figures will already be negatively affected by fewer working days, which will likely result in a renewed deepening of production decline," predicted UniCredit Bank analyst Patrik Rožumberský.
    The boost for domestic industry is likely to come only from abroad. "If the recovery in the eurozone continues, Czech industry could continue to improve on a month-on-month basis in the second half of the year," added Brožka. "It seems that the main impulse for the recovery of production is coming and will come from abroad," Rožumberský joined in.
    Construction production in June, after adjusting for the number of working days, fell by 0.9 percent. Seasonally adjusted construction production was 1 percent higher month-on-month. The construction industry is currently doing better than industry, but its outlook is worse. "Industry will quickly pick up as soon as foreign demand increases. The construction sector will be stifled by public finance problems. The state is rushing into record debt, and there will be little money left for public construction," warned Markéta Šichtařová, an analyst at Next Finance. "A significant risk for construction remains cuts in state contracts," agreed Petr Sklenář, an analyst at Atlantik FT.
    The year-on-year decline in industrial production was primarily due to the production of metal constructions, metalworking products, as well as the production of machinery and equipment, basic metals, foundry production, and manufacturing of motor vehicles. Industrial production, on the other hand, increased in the food production sector and other means of transport and equipment.
    Revenues from industrial activities at current prices fell by 14.2 percent year-on-year. Revenues from direct exports of industrial enterprises decreased in current prices by 11.1 percent, and their share of total revenues of industrial enterprises was 49.6 percent.
    The value of new orders in selected sectors fell by 13 percent year-on-year, with foreign orders decreasing by 8.3 percent. The largest contributors to the overall year-on-year decline in new orders were the production of basic metals, foundry production, production of metal constructions and metalworking products, and the production of computers, electronic and optical devices and equipment. New orders grew in the production of other means of transport and equipment and the production of basic pharmaceuticals and pharmaceutical preparations.
    The average registered number of employees in enterprises with 50 or more employees in the industry decreased by 13.1 percent year-on-year in June this year. The average monthly nominal wage of these employees increased by 2.4 percent year-on-year to 23,621 CZK.
    In construction, the average registered number of employees in enterprises with 50 or more employees increased by 1.1 percent year-on-year in June. The average monthly nominal wage of employees in construction increased by 3.5 percent year-on-year to 26,757 CZK.
    Construction production in the second quarter of this year at constant prices remained at the level of the previous year. Production in engineering construction increased by 21.9 percent year-on-year, while building construction fell by 8.5 percent.