The HSBC Czech Republic Manufacturing PMI fell to 47.2, the lowest reading since August 2009, from 48 in September, the bank said today in an e-mailed report compiled by Markit, a financial-information company. A result greater than 50 signals an improvement in performance, while a figure below signals deterioration.
“The main drag in the October survey came from new orders and new exports orders,” Agata Urbanska, a London-based economist at HSBC, said in the statement. “The German October PMI surprised on the downside, so did the ifo index; both highlighting more downside risks to manufacturing and export orders in the Czech Republic in the last quarter of the year.”
The economy relies on demand for cars, auto parts and electronics goods from the European Union, the market for about 80 percent of its exports. The government wants to push through a package of measures including tax increases that the central bank forecasts will further depress domestic demand next year.
The central bank in Prague cut the benchmark interest rate to a record-low 0.25 percent on Sept. 27 as weakening domestic demand pushed the economy into its second recession in three years. Gross domestic product contracted for three quarters through June as households cut spending in response to a worsening economic outlook across Europe.
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