The Central European economic rebound gathered pace in September when some of its biggest economies posted record growth in key manufacturing and export sectors, increasing employment across the region as it battles to shake off nearly two years of economic malaise.
Purchasing managers index data, or PMIs, released Tuesday showed that manufacturing grew in the Czech Republic, Poland and Hungary last month.
The weighted average manufacturing PMI for the whole [Central European] region rose to 53.4 in September, its highest since April 2011, said Citi economist Jaromir Sindel.
“The data released this morning are generally consistent with continued recovery in CEE,” Mr. Sindel said.
The figure for Hungary was its strongest since the spring this year, while for Poland it was the highest since April 2011, contributing to the country’s best quarterly average since the second quarter of 2011.
Economists said the figures were positive but cautioned that the region’s economies remain vulnerable to setbacks.
In the Czech Republic, growth declined slightly in September from August, mirroring a monthly fall in Germany, its key trading partner, but continued to show that manufacturing expanded and contributed to the country’s best quarterly reading in two years.
HSBC economist Agata Urbanska-Giner said output prices in Poland continued falling in September despite rising input prices, showing limited pricing power and indicating that the recovery is fragile.
She said that Czech growth was due in part to manufacturers cutting prices to win or maintain business in the month.
Employment was considered positive.
Poland’s employment index rose to its highest level in more than six years, while rising production lead to the fifth straight month of employment gains in the Czech Republic.
“This is very promising against the prevailing weakness of consumer demand since mid-2012 on the back of weak labor markets,” Ms Urbanska-Giner said.
Prague-based Raiffeisen economist, Vaclav France, said the September figures suggest the Czech economy could continue growing in the third and fourth quarters. Between April and June it posted its first quarterly economic growth since mid-2011.
Currencies took the data in their stride. The Polish zloty and the Czech koruna were little changed while the Hungarian forint traded up to 0.4% firmer against the euro.