Czech industrial production fell by 2.1% year on year and by 0.7% month on month in October, disappointing market expectations.

The industry returned to decline, where it was for much of spring and early summer, after it had managed to maintain moderate growth from August to September.

“The October result of the industry was partially influenced by a high comparison basis in some important economic activities of manufacturing, especially in the manufacture of other transport equipment and in the manufacture of motor vehicles, trailers and semi-trailers,” commented Radek Matějka of the Czech Statistical Office (CZSO).

The value of new orders at current prices registered an increase of 2% y/y and 0.5% m/m, with non-domestic new orders up by 3.1% y/y and domestic new orders up by 0.2% y/y.  

“An increase in the value of new industrial orders was the most contributed to by manufacture of computer, electronic and optical products. The number of new long-term orders also increased in enterprises in the manufacture of other transport equipment,” stated CZSO’s Veronika Doležalová.

Negative influence on the October development in the industry also came from a continued drop in the manufacture of machinery and equipment and in the manufacture of basic metals, while positive influence came from the manufacture of fabricated metal products, food products and mining and quarrying.

Local market analysts pointed to the developments in key export markets such as Germany when asked about projections of future developments.

“The year 2024 did not fulfil last year’s hopes of a revival,” Bohuslav Čížek, head of the economic policies at the Czech Union of Industry and Transportation, was quoted as saying by the Czech Press Agency (ČTK).     

CZSO also reported on the Czech construction output, which fell by 3.6% y/y and grew by 3.8 m/m. February and July were the only two months this year when construction output registered y/y growth.

In Czechia, “real estate is getting more expensive, but construction activity falls. It is evident that the market is not working the right way,” Štěpán Křeček, economic advisor to Prime Minister Petr Fiala, told ČTK, blaming “overregulation, lengthy permitting processes and botched digitalisation” for the situation. 

The y/y “decrease was contributed to by both civil engineering and building construction,” commented CZSO’s  Radek Matějka. Building construction output dropped by 3.1% y/y and civil engineering construction by 4.3%

Matějka’s colleague Petra Čuřínová added that the approximate value of construction permits amounted to CZK43.5bn (€1.7bn), falling by 17.6% y/y and that “the decrease is rather owing to a high comparison basis from October 2023, when eight large constructions were permitted with budgets over 1CZKbn.”

“After their deduction, the approximate value would increase by 12%,” Čuřínová concluded.

Construction of 2,571 dwellings was started in October, which is a drop of 14.6% y/y, while 1,846 dwellings were completed, or a drop of 48.4%.