Weaker crown helps to foreign trade

The effect of a weaker crown helped Czech exporters even more as the trade balance with the EU countries improved by 11,5 billion crowns (426 million euros).

The good June results of the Czech export (plus 13,5 percent) were followed by 12,3 percent import increase.

After a partial May drop, the domestic demand returned to the growth (10 percent). It reflects indirectly the successes scored by the Czech companies on the foreign markets but also the gradual stabilization related to the industry optimistic expectations, entrepreneurs‘ confidence, real wage development and improved employment rates.

The June numbers, published by the Czech Statistical Office (ČSÚ), show an employment increase by 1,7 percent as for the companies with 50 and more employees. The nominal wage in industry rose by 3,1 percent year-over-year.

The domestic demand should be, nevertheless, viewed as „on the way toward stabilization, but still rather fragile“ and sensitive to market fluctuations.

As a traditionally good industrial performance indicator, the Purchasing managers index rose in July to 56.5 points and after a June drop confirms a contracts increase, production and employment recovery and a rather optimistic managerial mood.