Construction and industry thrived in July, trade in surplus

Prague - The Czech industry and construction sector performed well in July. After a year-on-year decline of six percent in June, the industrial output grew by 5.6 percent, and construction accelerated its growth from June's 1.2 percent to 6.5 percent. The foreign trade balance ended with a surplus of 0.1 billion crowns, compared to a deficit of 8.2 billion last July. This information was published today by the Czech Statistical Office (CZSO).

The July growth in industrial production was significantly supported by the timing of plant-wide vacations, which greatly increased the output of the automotive industry. Car manufacturers carried out their traditional summer shutdowns only in August. Additionally, it was positively noted that this July had two more working days than last year. After adjustment, industrial production was only 0.1 percent higher year-on-year.

Car production increased by 13.6 percent year-on-year, the production of electrical devices was up by 5.6 percent, and in the case of pharmaceutical products, the growth was 22.1 percent. Conversely, the production of electricity, gas, heat, and air conditioning decreased by 12 percent.

In construction, both of its main components grew in July. Building construction, which includes the construction of apartments, offices, or warehouses, accelerated its growth from June's 1.5 percent to five percent. Civil engineering, which largely comprises transportation infrastructure, grew by 10.4 percent in July, compared to 0.7 percent in June.

In July, 24.3 percent more apartments were started than a year ago, and the residential construction that began in June rose by 8.3 percent. In July of this year, 3,088 apartments were started. The number of construction starts in family houses decreased by 0.2 percent year-on-year, while in apartment buildings it increased more than threefold.

"The construction sector has a chance to maintain a solid pace in the coming months thanks to a solid supply of private and public contracts. A hurdle for further growth may be the lack of qualified and unqualified workers, materials inventory, and well-prepared projects," noted ČSOB analyst Petr Dufek. Analysts expect the construction sector to grow by four to five percent for the entire year. Last year, it increased by 9.2 percent, the highest since 2003.

The June balance of foreign trade was positively influenced by trade in cars, oil, natural gas, and metalworking products. Conversely, trade in computers and machinery had an adverse effect.

"The decisive factor was the higher surplus in the motor vehicles balance, primarily due to an increase in exports by 13.7 billion crowns," stated Miluše Kavěnová, director of the CZSO's foreign trade statistics department.

Exports in July increased by 8.4 percent year-on-year to 289.6 billion crowns, and imports rose by 5.1 percent to 289.5 billion crowns. Trade with EU countries reported a surplus of 50.5 billion crowns in July, which was 9.2 billion crowns higher year-on-year. The trade deficit with non-EU countries deepened by 0.4 billion crowns to 48.7 billion crowns.