The August manufacturing PMI declined slightly to 54.9, hitting the lowest level in a year. But we are not too worried as the PMI remains solidly above the key 50-level signalling growth and summer-months are usually more volatile anyway. 

Today’s statistics from Czech GDP confirmed that the economy has geared down since the second half of last year. Even though GDP dynamics were revised two tick up to 0.7%, they lag behind Poland, Hungary and Slovakia. In a yoy comparison, growth eased to 2.4%. The comment for the preliminary reading indicated that growth was supported by the trade balance. Today’s figures showed it contributed 0.7pp to overall dynamics. Yet, in a yoy comparison, it acted negatively as it cut yoy growth 0.4pp. The very good results of external trade are not entirely positive news. The surplus is due to weak import dynamics. Consumption increased only 0.5% qoq. These are the weakest dynamics since the beginning of 2016. Investment has surprised with sound dynamics. We assume that a big amount of finished investment was moved from the inventory category to the investment category. Thus, inventory built was the biggest drag on growth as it impeded overall dynamics 0.8pp. In contrast, investment added 0.5pp with a 1.7% increase.