Czech March industrial output dropped more than economists forecast as car production declined, a sign the longest recession on record is stretching into 2013.

Output fell 6 percent in March from a year earlier after a 5.7 percent decline in the previous month, the statistics office in Prague said in a statement today. The median forecast of 15 economists in a Bloomberg survey was for a 4.5 percent contraction.

The $217 billion economy has shrunk in five consecutive quarters through the end of last year, the longest streak since records began in 1996, as households and businesses spend less because of Europe’s debt crisis and government austerity measures. The central bank is in uncharted territory after cutting interest rates to effectively zero last year and policy makers are debating whether currency sales are needed to meet their inflation goal.

“Czech industry continues to be covered by heavy clouds,” Patrik Rozumbersky, an analyst at UniCredit Bank Czech Republic AS said in a note today. “The biggest burden is undoubtedly the situation in the car industry, which is facing the consequences of declining demand on a pan-European scale. The numbers have further decreased hope that the recession in the Czech economy ended in the first quarter.”

The Czech koruna weakened 0.3 percent to 25.757 per euro as of 11:06 a.m. in Prague today. It has lost 4.8 percent to the euro since Sept. 17, the day before central bank Governor Miroslav Singer first said policy makers may sell the currency to meet their inflation goal. That’s the fourth-worst performance in that period among more than 20 emerging-market currencies tracked by Bloomberg after the Argentine peso and the South African rand.

Car Production

Automotive production, the Czech Republic’s largest manufacturing industry, fell 15.4 percent from a year earlier and was the biggest contributor to the total output decline, the statistics office said.

While the foreign trade surplus widened to 32.3 billion koruna ($1.6 billion) in March from 32.1 billion koruna in February, the result was worse than the median forecast of 36.5 billion-koruna surplus estimated in a Bloomberg survey of 13 economists. Exports fell 7.1 percent, declining faster than the 6.5 percent slump in imports, according to the statistics office.

Worsening forward-looking indicators in Germany indicate weakening demand on the Czech Republic’s largest export market, according to Jiri Skop, an analyst at Komercni Banka AS in Prague.

‘Downward Direction’

“The risks for the second and third quarter are in the downward direction and they’re stemming from external environment,” Skop said in a note to clients.

March production data showed a 0.9 percent increase in foreign orders, which was “good news,” according to Radomir Jac, chief analyst at Generali PPF Asset Management AS in Prague.

“Let us hope that this indeed represents some silver lining for performance of Czech industry in the spring months, that is in the second quarter of the year,” Jac said in an e-mailed comment.

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