Main Development Trends of Czech Economy in 2013 and the Perspective for 2014 (April 2014)
The Czech Industry Results in 2013 in the Context of the EU Market and the Perspective for 2014 The Development of Industry in 2013 Industrial production increased year-to-year by 0.5% in 2013. The result of industrial production was not, however, quite straightforward from the year-start, because the industry followed up a decline from 2012. Production achieved its bottom as early as in the first quarter of 2013, when its year-to-year decrease was 5.4%. The decline slightly lessened in the second quarter to 2.4%, and industrial production in the third and fourth quarters returned to growth by 3.9% and 6.1%, respectively. The total annual result reflected recovery in the Eurozone, in particular in Germany, and the improving situation on the European automobile market, which resulted in the growth of domestic production of cars and of related sectors. Industrial recovery was predicted not only by foreign leading indicators, but also by the CSO domestic development survey, which signalled from the mid-year an increase of production activities and strengthening of trust among businessmen. Industrial Production Index (annual changes in %) Source:Czech Statistical Office, March 2014, graf MIT, Department for Economics Analyses Production in the manufacturing industries in 2013 increased in 14 sectors (by 1.4%, measured by the Industrial Production Index IPI). The growing sectors accounted for 63.3% of the total industrial sales. Growth was forced mainly by foreign demand and it was recorded in particular in the sectors that realise their production on the EU market. As regards manufacturing industries, the highest increases were recorded in production of other transport equipment (by 9.1%), in production of pharmaceutical products and preparations (by 7.6%), in wood processing and production of wooden products (by 6.7%), in other manufacturing industries (by 6.1%), in production of metal structures and metal products (by 5.3%), in production of clothing (by 3.3%), in production of beverages (by 2.8%), in production of machinery (by 2.7%) and in production of transport equipment (by 2.5%). The other growing sectors recorded increased production up to two percent. 2
Nine manufacturing sectors recorded decreased production (those sectors accounted for 27.6% of total industrial production). The highest decrease was recorded in production of computers, electronic and optical products (by 8.7%), repairs and installations of machinery (by 8.4%), printing and copying of recorded media (by 7.5%) and coking and oil refining (by 6.6%). The other sectors recorded lower year-to-year decreases in production below five percent. Industrial production, direct export sales and new orders, including trends (organizations with 50 or more employees, year-on-year changes in %) Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses According to the MIT calculations (using available Eurostat data), industrial production in 2013 decreased year-to-year in EU-28 countries by 0.5%, in the Eurozone by 0.8%. Economic recovery was reflected in the growth of production in the fourth quarter of 2013 (production in the EU increased by 1.6%, in the Eurozone by 1.3%). There are very close links between the development in the Czech Republic and Germany and in the Eurozone, which is evident on the graph below. 3
Industrial production in Czech Republic, Germany and Eurozone, including the trends (year-on-year changes in %) Source: Eurostat, Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses The started growth of industrial production in the Eurozone in mid-2013 was reflected by a growth trend also in the Czech Republic. The development in the Czech Republic in late 2012 was affected by the total number of working days lower by three days, which was demonstrated by a higher growth in the end of 2013. By the main industrial groupings, the growth of production in the second half of the year was reflected in the annual results in increased production for intermediate consumption (by 1.9%), production for long-term consumption (by 1.3%), production for investments (by 1.2%) and production for short-term consumption (by 0.4%). Decreased production was recorded only in the energy sector (by 3.9%). Higher investment activities of industrial companies appeared in the third and fourth quarters of 2013. As regards classification of manufacturing industries by technological intensity, the MEDIUM HIGH- TECH sector occupied the most important position; it accounted for over a half of sales (50.6%, increasing its share by 1 point). Its production increased year-to-year by 3.6%. The sector includes automobile, electrical engineering and chemical industries. Growing sales were recorded also in the LOW-TECH sector - by 2.6%; the sector s share slightly increased (by 0.2 point to 15.2%). This sector includes less significant industries, such as the food industry, clothing industry, leather industry, wood-processing industry. Production in the other sectors decreased. The sales in the MEDIUM LOW- TECH were slightly lower by 0.1%, and its more than one fourth share decreased (by 0.4 point to 25.8%). This sector includes the branches related to the automobile industry (production of rubber and plastic products), metallurgy, production of metal structures, coking and oil refining and production of other non-metal mineral products. A higher decrease of sales was recorded by the HIGH-TECH sector - by 6.7%, decreasing its share (by 0.7 point to 8.5%). The development in this sector was adversely affected by a decrease in crucial production of computers. 4
Development of manufacturing industry production by technological intensity of production (y-o-y change in %, share in %, difference in pct. points) CZ-NACE Revenues from industrial activity Share in revenues of manufacturing industry Share in revenues of manufacturing industry in 2012 in 2013 Difference 2013-2012 Manufacturing industry total 1,5 100,0 100,0 0,0 HIGH-TECH -3,7 9,2 8,5-0,7 MEDIUM HIGH-TECH 3,6 49,6 50,6 1,0 MEDIUM LOW-TECH -0,1 26,2 25,8-0,4 LOW-TECH 2,6 15,0 15,2 0,2 Source: Czech Statistical Office, table by the Ministry of Industry and Trade, March 2014 The volume of total new orders in selected sectors was the indicator informing about further development of industries; in 2013 this volume increased by 4.8%. Crucial was the increase in foreign orders by 5.8%, which accounted for 70.8% of all orders. Foreign orders became the main driver of domestic growth due to recovery of production and of orders in the Eurozone (in particular in Germany in the second half of the year) and due to the strong mutual links between the economies. They increased in the third quarter by 16% and in the fourth quarter by 18.2%. The highest increase of those orders in selected sectors was recorded in 2013 in production of other transport equipment (by 22.4%), in production of metal structures and metal products (by 13.3%), in production of cars (by 12.5%) and in production of pharmaceutical products and preparations (by 9.7%). Domestic orders increased by 2.5%; as regards selected sectors, most significantly in production of clothing (by 18.3%), in production of machinery (by 11.3%), in production of metal structures and metal products (by 11.2%) and in production of electrical appliances (by 8.2%). A moderate increase of sales (by 1.7%) and a decrease in employment (by 1%) resulted in higher productivity by 2.7%. The development of productivity exceeded the growth of real wages by 3.7 points and it was reflected in a decrease in the unit nominal and real labour cost. Productivity increased in most sectors of manufacturing industries (in 18 sectors); on the contrary, decreases were recorded in five sectors. 5
The Expected Development of Industry in 2014 The growth of industrial production, started up in the second half of 2013, will continue in 2014. Whether it is maintained will depend on further development in the Eurozone, in particular in Germany. The industrial development in late 2013 indicates recovery of Eurozone economies. That is why a continuing growth of foreign demand can be expected, which will be reflected in the growth of industry in the Czech Republic due to the strong mutual connections. Industry will grow more in the first half of 2014 because of the low baseline; its growth will slightly decelerate in the second half of the year. The foreign leading indicators in early 2014 (e.g. Purchasing Manager Index PMI) achieve aboveaverage values in the long term, which are backed up by accelerated growth of new orders. Business sentiment in Germany improved at the beginning of the year, confirming the expectations that the largest European economy would grow faster in 2014. The March results, however, slightly cooled down the optimism due to the situation in Ukraine. On the contrary, the CSO development survey of selected industrial companies indicates that both the trust and assessment of total demand improved. The development of the domestic automobile industry will also be important; its share in the Czech industrial sales is crucial (about a fourth of sales in the industry). The development in car-making companies will depend on the growth of sales, which grew dynamically in late 2013. A favourable development in the automobile industry will have a positive influence on supplier sectors and branches. A continuing growth of industrial production, which started in the second half of 2013, can be expected also in 2014. Considering the development to date, continual recovery of European economies and continuing favourable development of the automobile industry, 3% up to 5% growth of industrial production can be expected in 2014. The prediction is backed up also by the results achieved at the beginning of the year, when industrial production in January increased yearto-year by 5.5% and in February by 6.7%. 6
The Development of the Building Industry in 2013 and the Perspective for 2014 The building industry continued decreasing last year; the building industry has suffered from this trend for the past five year. A lack of domestic demand, both public and private, is still visible. Decreased production did not avoid at building construction and civil engineering, which had negative effects for employment. Building production in 2013 decreased year-to-year by 6.7% in real terms. If compared to the boom in 2008, culminating in the third quarter of 2008, building production decreased by 25.1%. Construction production index (% change compared with the same quarter of the previous year) Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses Looking at building construction and civil engineering, production decreased in both sectors quite intensively. Production in building construction decreased year-to-year by 5.6% and civil engineering recorded a 9.3% decline. Neither building construction, nor civil engineering recorded positive yearto-year changes. Building construction achieved better results throughout the second half of the year. The year-to-year decrease in the third quarter was only 0.1% and in the fourth quarter 3.4%. Civil engineering recorded a year-to-year decrease by 2.6% in the last quarter, which was its highest decline in the last year. This result was better mainly due to the good conditions in December (warm weather and completion of invoices in the year-end). 7
Buildings and civil engineering works (% change compared with the same quarter of the previous year) Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses The approximate numbers of employees in the building industry keep decreasing due to the decline in building production. The average recorded headcount in enterprises with 50+ employees decreased year-to-year by 8.1%. The average nominal wages of those employees decreased in a yearto-year comparison by 3.2%, achieving CZK 29,042. Real wages decreased year-to-year by 4.5%. Productivity in the building industry increased year-to-year by 1.5% last year. With wages being lower, the nominal labour cost decreased year-to-year by 4.6% and the real unit labour cost by 5.9%. The numbers of permitted constructions and their approximate values also keep decreasing for several years in a line. Last year the number of building permits decreased by 13.2% year-to-year to 84,864. Such a decline in building permits was recorded for the last time in 2007. The number of permits did not exceed the preceding-year values in any quarter in the last year. Long-term trend of number of permits, estimated value number 180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 CZK mil. Estimated value Permits Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses 8
The approximate values of permitted constructions decreased year-to-year by 19.1% in 2013. The values of building adaptations decreased more during the whole year by 28.6% year-to-year, which was also due to the high baseline of the preceding year. The orientation values of new constructions decreased year-to-year by 12.3%. The values of new orders and the balance of orders in the year-end in enterprises with 50+ employees recorded a same year-to-year growth by 0.5% in 2013. The value of new orders amounted to CZK 149.9 billion. In financial terms the value of orders decreased to 60% of the value in 2008. Last year orders in building construction decreased year-to-year by 13.8% to CZK 67.2 billion. Orders in civil engineering increased by 16.1% to CZK 82.7 billion. The low baseline in the preceding year was reflected there. The average value of new order was CZK 3.6 million; it decreased year-to-year by 1.8%. The balance of orders, which means a stock of work-in-progress, in the end of 2013 was CZK 141 billion; it increased year-to-year by 0.5%. Last year the balance of orders in the year-end achieved quite a positive result, which was due only to orders from abroad. In year-to-year comparison such orders increased by as much as 58.4%. Their share achieved almost 17% last year, growing from 10.7% in the preceding year. Foreign orders recorded a positive result, which can show this year. The highest share, however, belongs to public contracts; their share decreased below 50% last year, while five years ago the share of public contracts had been approx. 70%. While a decline of orders in the public sector only could be seen in the preceding years, also private orders joined this trend last year. Public contracts decreased year-to-year by 2.6% last year. The value of total orders had been decreasing for the past four years. Long-term trend of construction orders value (construction enterprises 50+ employees) Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses 9
As regards housing projects, the numbers of both started and finished projects decreased last year. The number of started housing projects decreased year-to-year by 7.3%; construction of 22,108 apartments was started. Compared to 2008, when the boom culminated, the number of housing projects dropped to a half. The number of finished projects decreased year-to-year by 14.3% last year to 25,246 apartments. The numbers of finished projects decreased to the lowest level in the past ten years. The numbers of finished projects in 2013 were increasing by 3.4% only in the first quarter; for the remaining parts of the year the numbers kept decreasing. All kinds of constructions recorded lower numbers of finished projects. The numbers of finished apartments in single-family houses decreased year-toyear by 11.3% and the numbers of apartments in apartment houses by 14.7%. Housing construction (numbers) Source: Czech Statistical Office, March 2014, graph MIT, Department for Economics Analyses There will probably be no major change in the building industry this year. The development in the building industry can be influenced by priorities of the new Government. Government investments in the building industry, for example in the transport infrastructure, should increase. According to the Quarterly Analysis of the Czech Building Industry prepared by CEEC Research, managers of building companies expect a decrease in the sector by 0.6% this year. Growth in the building industry should appear next year by 1.8%. 10
The Development of Czech Foreign Trade in 2013 and the Perspective for 2014 In spite of the uneasy economic situation in Eurozone, the Czech foreign trade recorded good results in 2013. According to the cross-border statistics data, the trade surplus achieved a record value of CZK 350.7 billion, which is more by CZK 45 billion in year-to-year comparison. However, the development from the year-start was not quite straightforward, as both exports and imports in the first half of the year, except for April results (and exports in May), decreased in year-to-year comparison. Recovery as predicted by the leading indicators did not fully appear before the second half of the year and then it was so strong that the year-to-year values of both exports and imports were brought up to positive figures. Exports and imports increased; however, their dynamics declined year-to-year. While, according to the cross-border statistics, exports and imports of goods in 2012 increased year-to-year by 6.7% and 3.0%, respectively, exports in 2013 increased year-to-year by 3.0% and imports by 1.8%. International trade of the Czech Republic in 2005 2013 Source:Czech Statistical Office, March 2014, graf MIT, Department for Economics Analyses The foreign trade results in 2013 were affected particularly by the following factors: The improvement of both European and global economy, which was positively reflected in the development of foreign trade, in particular in the second half of the year. Persistent weak demand on the side of domestic households due to negative consumer expectations. A decrease in the first half of the year and a strong growth of industrial production in the second half-year, which was caused by recovery in Eurozone. In particular, increased demand for passenger cars brought industrial production in 2013 up to positive figures (the year-to-year growth was 0.5%). 11
The development of exchange rates; Czech koruna depreciated against the euro by 3.3% in average for the whole year 2013 to achieve the exchange rate EUR/CZK 25.974. Against US dollar, Czech koruna appreciated by 0.1%. The average exchange rate was USD/CZK 19.565. Prices of exports and imports; Export prices increased year-to-year in 2013 by 1.2%, while import prices decreased by 0.2%. The decrease of import prices was affected mainly by the development in mineral fuels; their import process decreased in average by 6%. On the contrary, as regards exports, the highest price increases were recorded by beverages and tobacco; their export prices increased by 9.2%. The terms of trade achieved for the while year a positive value of 1.4%. Import and Export Prices, Terms of Trade (%) Source:Czech Statistical Office, March 2014, graf MIT, Department for Economics Analyses Majority parts of Czech exports and imports were directed last year from/to the European Union. 81% of Czech exports were directed to EU28 countries, and the share of those countries in imports was 65.1%. The Czech Republic s dependence on EU28 declined year-to-year by 0.2 percentage points. In absolute terms, however, exports to EU countries increased by CZK 69 billion. On the contrary, the Czech Republic s dependence on imports from EU increased year-to-year by 0.8 percentage points. Implementation increased in absolute terms by CZK 51.9 billion. Exports to EU increased year-to-year by 2.8 percentage points and imports by 2.9%. The trade balance with EU countries closed with a surplus of CZK 733.2 billion, which was by CZK 17.1 billion more rather than in 2012. Traditionally, the highest trade surplus was achieved by the Czech Republic in 2013 with Germany. While exports to this territory increased year-to-year by 2.5%, imports increased by 2.8%. The trade balance surplus was CZK 270.0 billion, which is more by CZK 4.3 billion in year-to-year comparison. As regards the achieved surplus, Slovakia was the second most important country. Foreign trade with this country ended in a surplus of CZK 117.7 billion, which was more by CZK 7.3 billion rather than in 2012. The five countries with which the Czech Republic recorded the highest surpluses also include Great Britain and Northern Ireland (CZK 99.7 billion), France (CZK 66.3 billion) and Austria (CZK 57.8 billion). 12
On the contrary, the foreign trade balances with non-eu countries ended in deficits. The highest deficit was recorded by the Czech Republic in trade with China, CZK 265.2 billion. Compared to the last year, the deficit with this country declined by CZK 8.6 billion. The second highest deficit was recorded in the trade with South Korea (CZK 47.2 billion); compared to the last year the deficit declined by CZK 2.3 billion. High deficits were also recorded in trade with the Russian Federation (CZK 39.2 billion), Japan (CZK 34.8 billion) and Azerbaijan (CZK 23.6 billion). The teritorial structure of the international trade (2013) TURNOVER Annual EXPORTS Annual IMPORTS Annual BALANCE 2013 change 2013 change 2013 change 2012 2013 Indicator CZK mil. Share v % in % CZK mil. Share v % in % CZK mil. Share v % in % CZK mil. CZK mil. Total 5 981 396 100,0 102,4 3 166 050 100,0 103,0 2 815 346 100,0 101,8 305 710 350 704 Developed market economies 4 846 098 81,0 102,8 2 802 949 88,5 103,0 2 043 149 72,6 102,5 725 786 759 800 EU countries 28 4 396 159 73,5 102,8 2 564 690 81,0 102,8 1 831 469 65,1 102,9 716 123 733 221 EFTA countries 125 647 2,1 99,4 66 393 2,1 99,3 59 254 2,1 99,6 7 411 7 139 Other developed market countries 324 292 5,4 103,7 171 866 5,4 109,2 152 426 5,4 98,2 2 252 19 440 Developed countries 339 377 5,7 101,3 129 663 4,1 104,8 209 714 7,4 99,3-87 544-80 051 European transition economies 32 804 0,5 117,3 17 202 0,5 98,2 15 602 0,6 149,4 7 079 1 600 Commonwealth Independent States 394 182 6,6 99,0 172 964 5,5 100,0 221 218 7,9 98,3-52 128-48 254 Other *) 352206 5,9 100,9 40886 1,3 114,5 311320 11,1 99,3-277 775-270 434 OECD countries 4 790 771 80,1 102,5 2 730 260 86,2 102,9 2 060 511 73,2 101,9 632 727 669 749 *) China, North Korea, Cuba, Laos, Mongolia, Vietnam - Source: ČSÚ, March 2014, table MPO The international trade with chosen countries (2012-2013) Turnover Exports Imports 1-12/2012 1-12/2013 index 1-12/2012 1-12/2013 index 1-12/2012 1-12/2013 index 1-12/12 1-12/13 mil. CZK % mil. CZK % 13/12 mil. CZK % mil. CZK % 13/12 mil. CZK % mil. CZK % 13/12 mil. CZK mil. CZK Germany 1 665 809 1587,2 1 709 415 1502,8 102,6 966 190 1573,1 990 163 1457,9 102,5 699 619 1607,1 719 252 1569,4 102,8 266 571 270 911 Slovakia 444 548 423,6 446 017 392,1 100,3 277 491 451,8 281 850 415,0 101,6 167 057 383,7 164 167 358,2 98,3 110 434 117 683 Poland 383 492 365,4 397 741 349,7 103,7 187 115 304,6 188 714 277,9 100,9 196 377 451,1 209 027 456,1 106,4-9 262-20 313 China 339 234 323,2 340 331 299,2 100,3 32 712 53,3 37 572 55,3 114,9 306 522 704,1 302 759 660,6 98,8-273 810-265 187 Russia 272 925 260,0 271 582 238,8 99,5 118 025 192,2 116 215 171,1 98,5 154 900 355,8 155 367 339,0 100,3-36 875-39 152 France 241 415 230,0 246 399 216,6 102,1 155 152 252,6 156 372 230,2 100,8 86 263 198,2 90 027 196,4 104,4 68 889 66 345 Austria 230 159 219,3 229 918 202,1 99,9 141 646 230,6 143 838 211,8 101,5 88 513 203,3 86 080 187,8 97,3 53 133 57 758 Italy 217 147 206,9 225 569 198,3 103,9 110 329 179,6 114 120 168,0 103,4 106 818 245,4 111 449 243,2 104,3 3 511 2 671 Great Britain 199 270 189,9 205 586 180,7 103,2 147 084 239,5 152 628 224,7 103,8 52 186 119,9 52 958 115,6 101,5 94 898 99 670 Netherlands 195 361 186,1 180 439 158,6 92,4 99 312 161,7 88 566 130,4 89,2 96 049 220,6 91 873 200,5 95,7 3 263-3 307 Hungary 135 498 129,1 149 375 131,3 110,2 70 643 115,0 82 116 120,9 116,2 64 855 149,0 67 259 146,8 103,7 5 788 14 857 USA 129 432 123,3 129 949 114,2 100,4 70 093 114,1 69 091 101,7 98,6 59 339 136,3 60 858 132,8 102,6 10 754 8 233 Belgium 120 496 114,8 127 540 112,1 105,8 73 511 119,7 79 901 117,6 108,7 46 985 107,9 47 639 103,9 101,4 26 526 32 262 Spain 104 954 100,0 113 745 100,0 108,4 61 420 100,0 67 915 100,0 110,6 43 534 100,0 45 830 100,0 105,3 17 886 22 085 Switzerland 78 874 75,2 78 412 68,9 99,4 49 904 81,3 49 093 72,3 98,4 28 970 66,5 29 319 64,0 101,2 20 934 19 774 Korea 71 555 68,2 69 909 61,5 97,7 10 879 17,7 11 336 16,7 104,2 60 676 139,4 58 573 127,8 96,5-49 797-47 237 Sweden 71 263 67,9 73 470 64,6 103,1 46 428 75,6 47 297 69,6 101,9 24 835 57,0 26 173 57,1 105,4 21 593 21 124 Japan 69 863 66,6 68 935 60,6 98,7 13 976 22,8 17 091 25,2 122,3 55 887 128,4 51 844 113,1 92,8-41 911-34 753 Ukraine 55 653 53,0 55 545 48,8 99,8 33 365 54,3 32 136 47,3 96,3 22 288 51,2 23 409 51,1 105,0 11 077 8 727 Rumunia 55 590 53,0 66 825 58,7 120,2 34 732 56,5 39 309 57,9 113,2 20 858 47,9 27 516 60,0 131,9 13 874 11 793 Turkey 54 830 52,2 65 650 57,7 119,7 33 263 54,2 43 232 63,7 130,0 21 567 49,5 22 418 48,9 103,9 11 696 20 814 Norway 44 818 42,7 44 407 39,0 99,1 15 999 26,0 16 248 23,9 101,6 28 819 66,2 28 159 61,4 97,7-12 820-11 911 Denmark 38 733 36,9 42 756 37,6 110,4 23 231 37,8 25 999 38,3 111,9 15 502 35,6 16 757 36,6 108,1 7 729 9 242 Azerbaian 34 786 33,1 30 215 26,6 86,9 2 762 4,5 3 332 4,9 120,6 32 024 73,6 26 883 58,7 83,9-29 262-23 551 Thailand 27 413 26,1 25 155 22,1 91,8 3 140 5,1 3 056 4,5 97,3 24 273 55,8 22 099 48,2 91,0-21 133-19 043 Source:Czech Statistical Office, March 2014, graf MIT, Department for Economics Analyses Balance 13
As regards the structure of commodities, the favourable development of foreign trade was due in particular to machinery and transport equipment. Their share in exports was 53.8%, which is only slightly less (by 0.4 percentage points) rather than in 2012. Machinery and transport equipment accounted for 40.8% of imports, which is less by 0.5 percentage points in year-to-year comparison. Exports of this commodity group increased by 2.4%, imports increased by 0.4%, and the trade balance ended in a surplus of CZK 555.7 billion. The comodity structure of the international trade of the Czech Republic (2013) EXPORTS Annual IMPORTS Annual BALANCE 2013 change 2013 change 2012 2013 Indicator CZK mil. Share in % in % CZK mil. Share in % in % CZK mil. CZK mil. Total 3166050 100,0 103,0 2 815 346 100,0 101,8 305 710 350 704 of which: 0 Food and live animals 115460 3,6 106,9 144 400 5,1 105,6-28 726-28 940 1 Beverage and tabaco 22187 0,7 111,6 19 725 0,7 106,4 1 334 2 462 2 Crude materials 84680 2,7 98,0 77 846 2,8 98,2 7 133 6 834 3 Fuels and related products 100792 3,2 84,9 300 949 10,7 97,8-188 871-200 157 4 Animal and vegetable oils, fats and waxes 8654 0,3 94,3 6 298 0,2 116,0 3 747 2 356 5 Chemical and related products 201778 6,4 106,5 321 294 11,4 104,7-117 543-119 516 6 Manufactured goods classified chiefly by material 550002 17,4 103,3 503 442 17,9 102,0 38 817 46 560 7 Machinery and transport equipment 1703801 53,8 102,4 1 148 093 40,8 100,4 519 904 555 708 8 Miscellaneous manufactured articles 371630 11,7 109,2 283 677 10,1 106,0 72 869 87 953 9 Not specified 7066 0,2 153,9 9 622 0,3 127,5-2 954-2 556 Source:Czech Statistical Office, March 2014, graf MIT, Department for Economics Analyses According to the change of ownership methodology (national concept * ), exports increased year-toyear by 2.0% and imports by 0.1%. The trade balance recorded in 2013 a surplus of CZK 119.3 billion. The Expected Development of Foreign Trade in 2014 Good results in foreign trade can be expected also in 2014. The low baseline of the first six months of the last year and continuing recovery in and outside the Eurozone will play a significant and positive role in the next months of this year. Weaker Czech koruna will also be positive. Czech economy is in the stage of recovery; foreign trade considerably contributes to recovery of economic growth. The automobile industry with many related branches will be the main driver. The January and February foreign trade results, both in the national concept and in the methodology of cross-border statistics, achieve positive two-digit values, following up the dynamics of growing exports and imports from the end of the last year. After the first two months, the trade surplus in the national concept is CZK 27.7 billion, which is more by CZK 8.6 billion rather than in the last year, and according to the cross-border statistics, the January and February surplus is CZK 77.8 billion, which is more by CZK 14.7 billion in year-to-year comparison. * Results according to the national concept methodology are based on the change of ownership between residents and non-residents. Unlike data from the cross-border statistics, which record only flows of goods, often without any link to cash-flows, those results provide better information about export performance and efficiency of foreign trade. That is why, commencing from January results (published on 10 March 2014), the Czech Statistical Office prefers in its commentary the development and structure of the balance in the national concept. Tables with data in the national concept have already been published since 2011. 14
The values of certain leading indicators slightly declined in February; however, they remain on several-month maximums and achieve above-average values in the long-term, which promises continuation of the positive trend. The situation in the Czech industry is also positive; domestic companies expect moderate acceleration of the rate of production activities for the next three months and a moderate increase of the rate of employment in the manufacturing industry. 15