Czech Republic Industrial Output Increasing Says Eurostat
News Posted On: 20 April 2010
Industrial production in the Czech Republic saw a 7% year-on-year growth in February according to the latest data to be released by Eurostat. This followed a year-on-year growth of 7.5% in January.
The latest Eurostat figures on construction output in the Czech Republic are less positive however. According to the release, construction output in the Czech Republic was unchanged month-on-month in February, which wouldn't be bad but for the 21.9% fall recorded in January. Before that the biggest month-on-month contraction had been 3.5% in Oct last year. The same release tells us that the year on year contractions in January and February were 24.6% and 22.9% respectively.
While this is bad news for the construction industry, the fact that industrial output is rising in spite of the construction decline is ultimately good news for the wider economy.
Like so many countries during the last real estate boom, construction became far too important to the Czech economy, which left it incredibly exposed to the international financial crisis that took its largest toll on property markets and therefore construction industries. The fact that other sectors of the Czech economy are bouncing back more strongly than the construction sector, is good for the economy's future.
Such a construction lull can also be good news for investors, especially while the wider economy is recovering. This is because construction shortfalls bring supply constraints, which can push up prices in environments where demand is rising.
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