The volume of industrial output stagnated in comparison with November. December’s pace slowed to 2.9% y/y from 6.7%. The result was partially influenced by the lower number of working days in December 2007 vs. 2006; however, the declining dynamics of Czech industrial growth has been a trend that has been evident for the last several months.
Impacting growth have been decreases in foreign demand for Czech goods, the strengthening of CZK exchange rate and increasing unit wage costs – all of which have burdened Czech industrial companies.
Growth in industrial output reached 8.2% y/y in 2007. We expect this growth to come in at about 5% y/y for 2008.