Prague - December retail sales in the Czech Republic are disappointing, showed new data by the Czech Statistical Office. The sales decreased by 2.3 percent in comparison with November 2010, and by 1.3 percent compared to December 2009. These data are seasonally adjusted, for example to different number of working days.
Experts are mostly surprised and disappointed by the data.
Read more: Pulled by German boom: 2010 in Czech economy
Drop caused by growing fuel prices
"The market, including us, was far more optimistic, we expected a 3 percent growth. It is apparent that Czech households are sensitive to growing prices, for example of fuel. Revenues from fuel sales dropped by 14.2 percent, which is the deepest drop since February 2001," said Helena Horská from Raiffeisenbank, adding that Czech households were probably concerned for what will the new year bring.
The office also released the data for all 2010, showing that in 12 months, retail sales grew only by 1 percent.
It appears that 2010 was a good year only for e-shops. Their sales rose by 16.4 percent.
Experts do not expect the rather gloomy trend to improve soon. "The December retail results are in accord with our pessimistic prognosis for 2011. We expect a year-to-year 5 percent drop," says Horská.
The office's data about the Czech housing sector in 2010 are even gloomier. After shrinking by one percent in 2009, the housing activity dropped by 8 percent in 2010.
However, every cloud has a silver lining, and the number of new housing orders grew in 2010 by 15.7 percent in comparison with 2009. The value of the orders were nonetheless only 5.4 percent higher. This indicates that smaller and cheaper houses are being and going to be constructed, with smaller revenues for construction firms.
Manufacturing grew by 10 percent
Other economic results show a brighter picture. In December 2010, manufacture production in the Czech Republic grew by 10 percent compared to December 2009. This number is seasonally adjusted. However, compared to November 2010, the December manufacture production slowed down by 0.9 percent.
Car manufacturing has always been the motor of the Czech manufacturing growth, and December 2010 was no exception. In a year-to-year comparison, car production grew by 32.5 percent.
Read more: Booming China becomes key market for Czech Skoda Auto
The value of new orders in selected sectors grew by 11.5 percent, with orders from abroad increasing by 14 percent.
The downside to this is that so far, Czech producers have been able to manage the increase of production without hiring new employees.
