Czech industry is growing again

Czech industry sent a clear sign of life in March. The Purchasing Managers' Index (PMI) for the manufacturing sector rose to 52.8 points, its highest level for four years. Following a value of 50.0 in February, the index is now at or above the growth threshold for the second time in a row. This is more than just a statistical improvement for Czech industry: it is the clearest signal yet that the sector is stabilizing again after a long period of weakness. The increase was primarily driven by stronger production, new orders and a revival in export business. Many companies reported a noticeable improvement in demand from Europe. This not only improves the current business situation, but also the outlook for the coming months. However, the picture is not entirely without shadows. Despite growing demand, manufacturers are continuing to reduce their workforce - albeit at a slower pace than before. Apparently, the recovery has not yet been sufficient to justify the higher costs of new recruitment. Added to this is new cost pressure. Rising energy and oil prices have caused purchasing costs to rise more sharply than at any time since fall 2022. At the same time, the performance of suppliers deteriorated significantly. Many companies responded by building up stocks to protect themselves against further disruptions in their supply chains. Selling prices also increased, albeit not to the full extent. Many companies tried to maintain their competitiveness and only partially passed on the higher cost pressure. All in all, however, cautious optimism prevails. The mood in the sector is better than it has been for four years. However, the recovery remains fragile: external risks, higher input costs and fragile supply chains could quickly slow down the upturn again. The post Czech industry is growing again appeared first on ostwirtschaft.de.