After a drop in December, Czech industrial production grew by 1% year-on-year in January. Although car production saw a drop, other industrial sectors did well, shows data released by the Czech Statistics Office. 

In the month-on-month comparison, the growth of industrial output stood at 3.1% in January. 

“January results of industry followed the trend from the end of the previous year. The production of motor vehicles decreased due to persisting lack of parts and temporary shutdowns, however, other economic activities of industry were successful and industry as a whole slightly increased,” said Veronika Dolezalova, Head of Industrial Statistics Unit.

The highest growth of industrial production was recorded in manufacture of machinery and equipment and manufacture of other transport equipment, followed by increased demand in the pharmaceutical industry. On the contrary, both the car industry and woodworking industry decreased y/y, as did production of electricity and gas.

"Data and surveys for January and February this year should be seen as a historical picture that does not reflect the problems and uncertainties related to the war conflict in Ukraine and sanctions against Russia," Generali Investments analyst Radomir Jac commented for the Czech News Agency.

Jac expected that Czech industrial growth would reach around 6 per cent for this year. "But the conflict in Ukraine is leading to a rise in commodity prices. At the same time, due to import shortages from Ukraine, supplies of components for automotive companies are again going down. All of this poses a risk of weaker-than-expected industrial production growth this year," he added.

The value of new orders increased by 6.9% y/y. Non-domestic new orders increased by 8.3%, domestic new orders increased by 3.9% y/y.

“During the last three months, the value of newly contracted orders remained virtually unchanged. High growth rates in selected economic activities of industry were again significantly influenced by increasing prices,” Iveta Danisova from the Industrial Statistics Unit noted.