Czech Republic's PMI Reaches Highest Level Since 2022
The Purchasing Managers' Index (PMI) for the manufacturing sector in the Czech Republic, which is compiled monthly by S&P Global Market Intelligence, rose to 53.9 points in June, reaching its highest level since April 2022.
This represents a significant improvement over May’s reading of 52.2 points. Since February, the PMI has remained consistently above the 50-point growth threshold that separates expansion from contraction.
“The PMI data for June signal a further acceleration of the recovery in the Czech manufacturing sector. Higher production and a strong increase in new orders supported growth,” explained Siân Jones, chief economist at S&P Global Market Intelligence.
She added that part of the positive trend was attributable to customers restocking their inventories. At the same time, however, many companies also reported noticeably stronger demand. Capacity pressures remain high, however, as supply delays continue to hamper production and lead to a rise in order backlogs.
Czech manufacturers reported rising demand in June from both domestic and foreign markets. At the same time, inflationary pressure eased somewhat, while the business climate deteriorated slightly compared to May.
According to S&P Global, growth in new orders was the strongest since February 2022. International order intake also recorded its strongest growth since early 2022.
Despite the slowing momentum, cost pressures remain high. Companies cited rising transportation, freight, energy, fuel, and material costs as the main causes.
The rise in selling prices slowed compared to the peak in May, as production costs also increased at a slower pace.
After five months of job cuts, employment stabilized in June. Some companies even expanded their workforces slightly, attributing this to the higher volume of new orders.
Although supply chains have improved over the past three months, companies continued to report delays, which are attributed, among other things, to the impact of the conflict in the Middle East.
Despite a slight slowdown compared to May, the business climate remained positive overall. Companies expect greater stability in international markets.
“However, price pressure remains one of the biggest risks for manufacturers,” Jones emphasized. According to the latest forecast from S&P Global Market Intelligence, consumer price inflation in the Czech Republic is expected to rise to 2.5% in 2026, as companies increasingly pass on higher costs to their customers.
