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CEE ECONOMY-Manufacturing growth loses some momentum in August

CEE ECONOMY-Manufacturing growth loses some momentum in August

reuters.com · 09/01/2021 04:13
CEE ECONOMY-Manufacturing growth loses some momentum in August

- Central Europe's manufacturing sector remained firmly on a growth path in August but the expansion continued to slow from a previous record pace amid capacity constraints, surveys showed on Wednesday.

IHS Markit's Purchasing Managers' Index (PMI) for Poland fell to 56.0 in August, from 57.6 in July and below analysts' expectations while remaining well above the 50.0 line that separates growth from contraction. nZRN002P9S

Markit's Czech PMI survey slowed to 61.0 in August from 62.0 in July. Hungarian PMI, published by the Association of Logistics, Purchasing and Inventory Management, edged up slightly to 55.9 in August, from 55.8. nZRN002P9V nS8N2MT055

"The Polish manufacturing sector continued to lose momentum in August, but overall conditions continued to improve strongly with the PMI at its fourth-highest level since December 2010," said Trevor Balchin, economics director at IHS Markit.

Manufacturing sentiment has slipped from record levels in the past two months.

Polish PMI showed new orders easing to a four-month low. In the Czech Republic, the output component of the survey eased amid capacity shortages and delays in shipments of materials.

Supply bottlenecks also drove German PMI to a six-month low. nZRN002PA5 Germany is a key trading partner for central Europe.

Constraints across the region have been most evident in the car sector. On Tuesday, Japanese carmaker Suzuki said it would halt production at its factory in Hungary for two weeks in September due to a global shortage of microchips. nL1N2Q21HV

Manufacturing has buoyed central Europe's economies during the coronavirus pandemic. After some plants idled at the outset of the pandemic in early 2020 - which hammered economic output - companies have been able to keep running.

Now with restrictions on retail and hospitality being lifted during the second quarter, economic growth is taking off.

Hungary's economy soared 17.9% year-on-year in the second quarter, updated statistics office data showed on Wednesday.

Hungary also saw a 2.7% rise quarter-on-quarter, ahead of Poland's 2.1% and the Czech economy's 1.0%. nS8N2MT056 nL1N2Q20JY

(Reporting by Alan Charlish in Warsaw, Mirka Krufova in Prague and Gergely Szakacs and Anita Komuves in Budapest; Writing by Jason Hovet
Editing by Gareth Jones)

((jason.hovet@thomsonreuters.com; +420 234 721 613;))