Czech Manufacturing Sector Hints at Recovery

Despite a stagnant year, optimism is building for the Czech manufacturing industry. Patria Finance Chief Economist Dominik Rusinko noted, “Although the industry stagnated for most of last year, the better mood in December gives hope for a gradual recovery in 2026.”

S&P Global’s recent report confirms improved conditions. Their monthly index, which uses 50 as the benchmark for growth versus decline, rose above that level last June – marking the first growth month since May 2022.

Companies ended the year by reducing inventories, finishing existing orders, and even adding to their workforce. Importantly, they also expressed optimism about the year ahead.

Creditas Bank Chief Economist Petr Dufek believes continued positive momentum is key. “if the December result can be repeated in January, it will mean that the industry is out of the worst,” he said.

Growth at the end of the year was driven by increases in production, new orders, and employment.While these increases were modest, improved demand was apparent in both domestic and export markets. Input purchases and inventory levels declined at a slower rate, and business confidence reached a three-month high.

The expansion was slight, but a welcome change. Unlike much of the year, it signaled improving demand. At the same time, input purchases fell.