FX.co ★ Czech Republic Manufacturing Activity Contracts at Faster Pace

In September 2025, the S&P Global Czechia Manufacturing PMI dipped to 49.2 from 49.4 in August, slightly exceeding market forecasts of 49.0. This indicates the most significant decline in manufacturing conditions since May. The downturn resulted from a renewed decrease in new orders, evidenced by the steepest drop in export demand in four months, particularly affected by sluggish conditions in major European markets. Although production output also saw a second consecutive month of contraction, the decline was marginal. Companies continued to reduce employment and purchasing of inputs due to diminished demand. However, job cuts slowed as order backlogs increased at the fastest rate since February 2022. Concurrently, the tepid demand for inputs eased cost pressures, with input prices rising at their slowest rate in 2025 thus far, while competitive pressures led to further reductions in selling prices. In spite of these challenges, business confidence rose to a three-month high, buoyed by anticipated recovery in customer demand, investments in new products, and plans for market growth.