PRAGUE, Oct 8 (Reuters) - Czech industrial output fell inAugust and unemployment ticked higher in September, data showedon Monday, raising fears of a fourth straight quarter ofcontraction and indicating government austerity measures aredeepening the economic downturn.
A fall in the production of electronics production helpedpush output down 3.1 percent on an annual basis in August,undershooting market expectations of a 0.5 percent increase.
The stats office said the data had been affected by somefactories shifting summer holidays to August rather than holdthem in their usual period in July. New orders fell 1.4 percent,but domestic orders fell much faster than export orders,indicating government belt-tightening was squeezing Czechconsumers even as the euro zone crisis hit demand from abroad.
In other data, the Labour and Social Affairs Ministry saidthe unemployment rate rose 8.4 percent in September, aboveexpectations for 8.3 percent.
Foreign trade also posted a 16.9 billion crown ($887.65million) surplus in August, just above the median analysts'forecast of 15.75 billion.
The office also released foreign trade data adjusted fortransactions by non-residents showing a deficit of 2.1 billioncrowns, down from a revised 3.62 billion surplus last month.
The new methodology looks at a change in ownership of goodsbetween residents and non-residents instead of taking intoaccount the cross-border move as the point where internationaltrade is conducted. It is calculated on the basis ofvalue-added, or sales, tax reports.**************************************************************KEY POINTS:INDUSTRIAL OUTPUT(y/y change in pct) Aug July Aug fcastIndustrial output -3.1 4.2 0.5Industrial sales -0.7 5.8 n/aFOREIGN TRADE(in bln CZK) Aug July Aug fcastbalance 16.90 24.33(25.85) 15.75
(nominal y/y change in pct)
exports 7.9 11.1 (10.3) 6.4imports 0.8 5.8 (4.2) 2.2
FOREIGN TRADE UNDER NATIONAL METHOD
balance -2.08 3.62(5.94) -1.80CZECH UNEMPLOYMENT Sept Aug Sept fcastpct of workforce 8.4 8.3 8.3
Details of August industrial output data.......
Details of August foreign trade data...........
Details of September jobless data..............
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT
"It (industrial output) is an unpleasant number and itdeteriorates expectations for third quarter GDP."
"If we look at it as a whole, including construction andunemployment, there is a negative surprise in all the numbers.
"The state of the economy is markedly deteriorating andfulfilling the central bank's outlook. This increases thelikelihood that the central bank will revise its outlookdownward in November and maybe will try to cut interest ratesone more time."
MIROSLAV FRAYER, ECONOMIC & STRATEGY RESEARCH, KOMERCNIBANKA
"The rise in unemployment... was mainly due to an entry ofgraduates on the labour market.
"The unfavourable macroeconomic situation should reflect ina further increase in the unemployment rate while the end of theyear is traditionally negatively affected by a reduction ofseasonal jobs.
"We estimate the rate at 9.2 percent at the end of thisyear."
RAROMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
"August data on Czech industrial output are disappointing,certainly if compared to market expectations."
"However, as we noted already last month on the July datathat were better than expected: it seems that seasonal factors(company holidays) might have impacted activity in Czechindustry in a positive way in July but in a negative way inAugust."
"We think that this is certainly part of the explanation ofthe weak reading for August.
"On top of that, however, new orders were also very weak inAugust, which reminds us that the overall performance of Czechindustry seen in August was not only about seasonality but thatit corresponds also to weak demand both in major exportdestinations as well as in the domestic economy."
"Foreign trade again shows a very nice surplus with strongyear-on-year improvement (of the surplus)."
"Exports came pretty in line with our expectations and theyare not performing that badly when situation in the Eurozone istaken into account."
"However, the data published today can be hardly interpretedas good news for the Czech crown. Nevertheless, we think thatthe market should not overestimate the weakness seen inindustrial statistics: yes, the general trend remains weak fornow but there was significant impact of seasonality on July andAugust data."
KEY DETAILS:INDUSTRIAL OUTPUT- Overall new orders fell 1.4 percent year-on-year on a 3.0percent drop in domestic orders and a 0.5 percent dip in ordersfrom abroad.- Construction output, measured by a separate index, fell by 4.7percent year-on-year in August after a 0.5 percent drop themonth before.FOREIGN TRADE- The trade balance surplus was at 16.90 billion crowns inAugust, from a revised 24.33 billion in July.- In euro terms, exports rose 4.7 percent and imports fell by2.2 percent.
- Market expectations before release
- Slovak July trade figures- August consumer inflation
- August producer prices figures
- Report on last Czech c.bank rate decision......
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($1 = 19.0391 Czech crowns)
(Reporting by Mirka Krufova; and Jana Mlcochova)
Keywords: CZECH ECONOMY/