Industrial production (Jul): 4.2% y/y
Consensus: 1.8% y/y
Previous (Jun): -2.7% y/y
The industrial data is surprisingly good although it was positively influenced by the number of working days. The industry was driven mainly by car manufacturing (+7.5%) and electrical equipment (+19.7%). On the other side, computer and electronic products (-8.6%) and basic materials (-5.3%) were the most significant drags.
The industrial sales grew by 5.8% y/y, while the export sales showed a significant growth of 9.4%. Good news for the outlook is that new orders increased by 16%. The growth was mostly driven by orders from abroad (+22.7%), while local orders increased by 4.1%. There was a significant increase in demand for vehicles and machinery. The foreign trade data suggests that the demand comes mainly from Russia and other post-Soviet republics and from Asia. Despite the increasing activity, employment in the industrial sector decreased by 0.6%.
There are definitely some positive signs in the July industrial figures. However, the results were influenced by the calendar and base effects and still may be a one-off improvement. Moreover, the outlook for the Eurozone, the CR´s key export market, has deteriorated. In 2012, we expect the industrial production growth to be slightly above zero.