Czech industrial production took another hit in November, recording a year-on-year decline of 2.7%, according to the Czech Statistical Office (CZSO). This marks a sharper downturn compared to the 2.1% drop seen in October, with faltering car manufacturing and weak foreign orders leading the charge.
Month-on-month, production slid by 1.5%, while the value of new orders dipped 1.4% compared to the previous month. November’s drop continues a troubling trend, making it the second consecutive month of year-on-year declines following brief spurts of growth earlier in 2024. Only February showed consistent industrial gains during the year.
Radek Matějka from CZSO pointed to significant declines in motor vehicle production and associated industries like rubber and plastics as key factors. “A long-term decrease in the manufacture of machinery and equipment further continued,” Matějka explained, highlighting deeper structural issues.
Interestingly, some growth in non-metallic mineral products and processing industries, fueled by extraordinary orders ahead of the holiday season, managed to cushion the blow slightly.
Domestic orders grew by 3.1% year-on-year in November, but this gain was overshadowed by a 3.8% drop in foreign demand. Notably, orders for motor vehicles, trailers, and semi-trailers saw significant declines, compounded by a high comparison base from the previous year. “The value of new orders in the manufacture of machinery and equipment decreased by a tenth, year-on-year,” added Iveta Danišová of CZSO.
The industrial sector’s workforce shrank by 2% in November, but workers saw their average gross wages rise by 4.3% compared to 2022. While this offers a silver lining for employees, it underscores the broader challenges in sustaining industrial jobs amid shrinking output.
The woes of Czechia’s industrial sector echo broader challenges in neighboring Germany, where the transition to electric vehicles (EVs) and declining demand have wreaked havoc. Major manufacturers, like Volkswagen and Schaeffler, have announced sweeping job cuts and plant closures across Europe, including in Czech towns like Lanškroun and Svitavy.
Germany, Europe’s largest economy, faces a grim outlook, with bankruptcies expected to rise 25–30% in 2025, reaching levels not seen since the 2009 financial crisis. The automotive supply chain, construction, and mechanical engineering sectors are bracing for the worst, hit by soaring energy costs and declining demand.
For Czechia, the struggles in car manufacturing—a linchpin of its economy—underscore the urgent need to adapt. The November data highlights not just immediate setbacks but the broader vulnerabilities facing industrial sectors across Europe. As energy costs climb and global demand wanes, the road ahead looks increasingly uncertain for the nation’s industrial backbone.
