In Business News this week: Czech central bank predicts labour market improvement; Czech Republic increasingly attractive for international manufacturers; car production up by 11 pct between January and September; railway operator ČD Cargo doubles profit but loses market share; and developer Orco leaves Prague stock exchange.
The governor of the Czech National Bank, Miroslav Singer, expects the continuing growth of the Czech economy to positively affect the country’s labour market. In an address to MPs on Friday, Mr Singer said signs of improvement had already been registered as the unemployment rate is slowly decreasing and demand for part-time jobs has eased. In August, unemployment stagnated at 7.4 percent. The central bank expects GDP growth of 3 percent this year, mainly fuelled by investments reflecting revived foreign demand. It also foresees higher government spending and household consumption.
The Czech Republic is increasingly attractive for international manufacturing companies, according to a report by real estate consultancy JLL released this week. The country’s industrial real-estate market saw record growth last year when over one million square metres were leased to foreign firms, the report says. Among the manufacturers that recently moved production to the Czech Republic are the auto interior producer Johnsons Controls and Smiths Medical, which produces medical instruments and equipment. JLL analysts say that inexpensive skilled labour, quality infrastructure and geographical location, as well as a recent increase in the German minimum wage, have contributed to the trend.
A total of 871,343 cars were produced in the Czech Republic in the first eight months of the year, representing year-on-year growth of 11 percent, the news agency ČTK reported this week, quoting figures from the country’s Automotive Industry Association and individual car producers. In August, production slowed due to summer holiday shutdowns at production plants. Škoda Auto, the largest Czech car manufacturer, produced over 461,000 vehicles in the first eight months of 2014, a 23 percent increase on the same period last year.
The Czech state-owned freight railway operator ČD Cargo has doubled its profits but lost market share, the daily Hospodářské noviny reported on Friday. The company’s profits reached 540 million crowns in the first six months of the year, up by 300 million in the same period last year. However, revenues decreased by five percent between January and July; ČD Cargo blames this on growing competition among operators in the coal, lignite, iron and machinery transportation segments.
Orco Property Group, a Luxembourg based real-estate and developer firm, is leaving the Prague Stock Exchange. The move, announced in July, comes after Orco saw its stocks plummet from an all-time high of 2,500 crowns per share, registered in 2007, to the current value of just 11 crowns. In 2011, the firm also exited the Budapest bourse, though it continues to trade on the Paris and Warsaw exchanges. In the first two years after Orco’s started trading at the Prague bourse in 2005, the firm’s shares grew by 200 percent but they have been steadily declining since. The company has also been struggling with poor results, registering a net loss of 54.4 million euros in the first quarter of the year.
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