The latest snapshot of the state of Czech manufacturing industry provided by the monthly Purchasing Managers' Index compiled by Markit for HSBC shows the composite index unchanged in August from the weak levels of July 2011.

New orders and output advanced strongly, making up for poorer performances from suppliers' delivery times, employment and stocks of purchases. The composite index was unchanged month-on-month in August at 53.4. Any figure over 50 indicates a continuing improvement in the sector’s performance. Production advanced at the fastest rate since May as firms tried to keep pace with an increasing backlog of orders.

Markit said in its commentary on the survey results that "The current sequence of rising new business volumes was extended to more than two years in the latest survey period. Moreover, having slowed to a 19 month low in July, the rate of expansion accelerated to a solid pace."

Manufacturing companies continued to take on new workers, with the continuing recruitment trend extending to 18 months. Suppliers, however, kept pace with the increased pace of production with their delivery times lengthening only slightly.

The commentary added that "This partly reflected a slower rise in purchasing activity by Czech manufacturers, whose stocks of inputs fell slightly during the month."

The overall index has been gaining since its low point at the start of 2009, although the rise only moved into positive territory above the 50 points mark towards the end of that year. The index peaked near the start of 2011 at just over 60 points but has been falling back since.

(Sourced from www.ceskapozice.cz)