Czech Republic Economy - Review

The economy in the Czech Republic has been somewhat unpredictable in recent years and this trend looks set to continue making it hard for companies to make the right decisions when it comes to products and staff. Unemployment is now at an extremely low point at just over 2% but some companies are experiencing difficulties with seasonal workers. Whilst this is proving a good option for some, others find that it isn't benefitting the business whatsoever.

Last year was an extremely good year for the Czech Republic with a growth of over 4%, faster than many other members of the European Union. However, this may have been slightly boosted by the panic surrounding European funds; they either had to be used or be lost. For this reason, growth 12 months later is expected to be lower.

When it comes to manufacturing, a 3.6% increase in output was experienced in March and a 1.5% increase in February, when compared to the year before. The auto sector is still very much driving the economy forward and growth here reached 11%; other modes of transport also saw increases of nearly 6%. It wasn't all good news though as both metal and chemical production witnessed severe decreases of 7% and 18% respectively.

In terms of orders, a 1.5% decrease was seen from March 2015 to March 2016 with regards to manufacturers. This change was affected by a decrease in every single manufacturing industry apart from car manufacturing. Demand from the domestic market has dropped severely over the last 12 months and the whole industry would have been affected even more if it were not for the increase of interest from abroad. Demand for Czech products has increased on the international market which has compensated for the lack of interest at home and is responsible for a first quarter increase in orders of 0.6%.

March was also not a good month for construction; a nearly 13% decrease was seen in output and the number of workers in the industry fell by over 3%. Even a positive increase in the amount of permits for new buildings couldn't bring smiles to faces because it has been overshadowed by the fact that the value of these projects is significantly less than 12 months ago.

Image provided by: © Thorken | Dreamstime.com - Trademark Of Ceska Sporitelna Photo

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