The Czech industry has already started to feel economic slowdown, the first signs of which are coming from abroad, the Confederation of Industry has told CTK before the International Engineering Fair (MSV) starting in Brno on Monday.
A growing number of companies have noticed weakening foreign demand, the confederation said, referring to a regular survey conducted in cooperation with the Czech National Bank (CNB).
Manufacturing production in Germany is staying below the level of the year 2018 and German companies have been reporting a decline in orders since the beginning of the year.
"The Czech and German economies are interlinked in business and ownership terms. As a result, we can feel the impacts of development in Germany. Our economy is nevertheless still growing faster than the German one," confederation head Jaroslav Hanak said.
The cool-down of the German economy will unavoidably arrive in Czechia, so domestic firms should get ready for this situation, for example by investing in digitisation, the confederation said.
Czech companies can benefit from the advantage that the domestic economy reported growth in the first half of this year. Exports rose as well, being 5.6 percent higher yr/yr in the first five months of the year. Most of Czech exports, however, go to the EU internal market, which may turn out to be risky in connection with the weakening European economy, the confederation said.
In addition, the situation is complicated by ongoing trade disputes between the USA and China and the USA and the EU, the threat of no-deal Brexit and Russian sanctions against Iran, the confederation added.
Czech exporters should therefore look for partners in southeastern Asia, Sub-Saharan Africa and South America, according to the confederation.
