Industrial production in the Czech Republic has fallen by 2.7% year-on-year, and decreased by 1.5% compared to October, according to the Czech Statistical Office’s report on Thursday.
This marks the second consecutive month of decline in industrial production, primarily driven by the automotive sector and manufacturers of car parts.
Production of other non-metallic mineral products and miscellaneous manufacturing had a positive impact on the overall figures, with special orders and increased pre-Christmas production. However, the total value of new orders fell by 1.4% year-on-year, according to the statistics.
“The results of the industry last year were largely improved by car manufacturers, but as the past year shows, there is no room for further growth here,” said Petr Dufek, Chief Economist at Bank Creditas. “Without additional financial incentives from demand, plans to develop electric mobility are facing the realities of everyday life or consumer preferences,” he added.
According to Deloitte economist Filip Pastucha, the automotive sector showed a significant decline of 7.1%. Dufek noted that weak external and internal demand remains the primary factor restraining industry development. “This is reflected in the dynamics of new orders in November, which also declined, including in the automotive industry. In this key sector, we’re seeing a slight 5% decrease,” the economist said.
The weak industrial performance is putting pressure on further rationalization, which is manifesting in job cuts.
Dufek believes that, given the situation in Germany, the Czech industry will likely experience better times only in the second half of the year. “The question is how it will be able to compete in international markets with high energy prices,” he added.
