PRAGUE: Czech industrial output fell by 1.4% year-on-year in August, slipping for the first time since February as global chip shortages cut into car production.
Signs are pointing to a slowing manufacturing recovery in the Czech Republic and other central European countries, with global shortages amid supply chain snags and rising costs weighing on growth.
That is being seen most clearly in the region’s car sector where plants have had to idle at times because shortages of chips to complete vehicles.
Czech statistics office data on Thursday showed a sharp fall in car production in August and the office said unplanned extended holidays in the sector contributed to the output drop.
The overall industrial drop comes after revised growth of 6.8% in July. Analysts polled by Reuters had expected output to rise by 2.6% in August.
However, industrial production across July and August – when factories plan annual summer breaks and which can cause fluctuations in output – rose by almost 3% year-on-year.
“It is not a surprise that the biggest brake to industry in August were car plants,” Komercni Banka senior economist Michal Brozka said.
“It is not good to draw big conclusions from developments in the summer months.
“Nonetheless, firms still see a shortage of materials and components. And in the coming months unstable development can be expected along with on average slower growth.”
The Czech Automotive Association reported in September that car production fell 39% year-on-year in July and August.
Last month, Toyota‘s Czech plant temporarily halted because of shortages, while the country’s biggest exporter, Skoda Auto of the Volkswagen group, idled production plants in the last week of the month.
The disruptions in the car sector also showed up in foreign trade figures in August, with the balance posting a deeper-than-expected deficit, statistics office showed on Thursday.