Czech manufacturing sector sees sharpest decline since January

Investing.com -- Czech manufacturing firms experienced a stronger decline in operating conditions in October, with the S&P Global Czechia Manufacturing PMI falling to 47.2 from 49.2 in September.

The latest reading marked the fastest deterioration in the health of the sector since January and the fourth consecutive monthly decline, according to data collected between October 9-23.

Output levels contracted at an accelerated pace, reaching the fastest rate of decline since January as manufacturers reduced production amid weak customer demand. New orders fell at the sharpest rate since the start of the year, while new export orders - which have been declining continuously since March 2022 - contracted at the strongest pace in six months.

Employment in the manufacturing sector decreased at the fastest rate in seven months as companies implemented cost-cutting measures in response to falling orders. Business confidence regarding future output dipped to its lowest level in 2025 so far, with firms expressing concerns about the duration of the current downturn in customer demand.

On the price front, input cost inflation slowed to the weakest pace since February 2024, with only a fractional increase recorded. Lower costs for oil-derived products and weak demand for inputs contributed to the easing inflation. Output charges continued to fall for the fifth consecutive month as companies faced pressure from competition and muted demand conditions.

"Czech manufacturing firms went into the final quarter of the year on less sure footing, amid accelerated contractions in output, new orders and employment in October," said Siân Jones, Principal Economist at S&P Global Market Intelligence.

The purchasing activity of manufacturers continued to decline, extending the current sequence of decline seen since June 2022. Stocks of purchases fell at a quicker pace, while post-production inventories returned to marginal growth as firms worked to maintain production processes.

S&P Global Market Intelligence forecasts industrial production in Czechia to rise by 1.0% in 2025.

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