Industrial production decelerated to a single-digit growth and today’s print slightly disappointed when compared with consensus forecast. Nevertheless, if we take into account improvement at beginning of the last year and rising bases for year-over-year comparison, actual data do not represent any change of the positive trajectory. Industrial output relies mainly on car production and steel mills. The former rose by 21.5% yoy, the latter by 17.1% yoy. Production of plastics and rubber also keeps a strong gain (14.4% yoy). Manufacture of machinery increased by 16.4% yoy. On the other hand, an unscheduled maintenance decreased production at Litvinov refinery and (280,1 CZK, -0,99%) scaled down coke production this year. Thus, combined production of refineries and coking plants dropped by 15.8% yoy. Volume of new orders rose by 9.7% yoy, export orders jumped by 18.9% yoy.
These figures together with continuing strong PMI print promises positive development of the industrial production in coming months. Employment rose by 4.2% yoy, ages grew by 4.5% (2.8% in real terms). Productivity gain remains strong enough to keep unit labor costs falling down (for 18 months in a row). In Q1, industrial production increased by 12.7%. Our forecast points to 9% growth in 2011.
Actual (Mar): 9.5% yoy
Consensus: 12.3% yoy
Previous (Feb): 13.0% yoy