NORDIC chamber of commerce in the czech republic czech economy facts - - PDF document

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NORDIC chamber of commerce in the czech republic czech economy facts - - PDF document

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NORDIC chamber of commerce in the czech republic czech economy facts in brief 2015 Czech economy facts in brief 2015 Industrial production has for centuries played a crucial role in Czech economy. In the Austro-Hungarian period the

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czech economy facts in brief

2015

NORDIC chamber of commerce in the czech republic

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Industrial production has for centuries played a crucial role in Czech economy. In the Austro-Hungarian period the Czech lands emerged as an industrial base for the entire monarchy. When multi-national Czechoslovakia was estab- lished in 1918, manufacturing developed so greatly that the country took place among the world’s larger industrial

  • countries. Nowadays, industry is still a significant part of the country’s economy, making up almost 40 percent of its
  • GDP. The main pillars are engineering and machine production, transport equipment, mining and chemistry, followed

by the energy industry, civil engineering and consumer goods. Since the early 1990s the importance of science and research, for instance within nanotechnology, has been rapidly growing. (Nordic News)

1990-2014: RAPID GROWTH WITH MARKET ECONOMY

In real terms the GDP of the Czech Republic grew by nearly 50 percent from 1989 to 2014. In the same period the country’s real average wage increased by 52 percent, from nominally CZK 3,170 to CZK 25,800. “A quarter of a century with market economy has significantly improved Czech economic output and our standard of living,” comments David Marek, chief economist at Deloitte. In purchasing power parity Czech GDP per capita grew from 60percent compared to EC average in 1993 to 84 percent compared to EU average in 2014.

(ČTK)

2014 GDP 2014 GDP (PPP) GDP (nom.) GDP (PPP) euro mill. per capita per capita EU 28=100%

Denmark 256,938 33,900 45,500 124 Sweden 430,258 34,100 44,300 124 Finland 204,015 30,000 37,400 110 Czech Rep. 154,939 23,000 14,700 84 Slovakia 75,215 20,800 13,900 76 Poland 413,133 18,600 10,700 68 Hungary 103,303 18,500 10,500 68

1937 USD 1950 USD 1989 USD

  • 5. Denmark

5,668

  • 10. Denmark

6,943

  • 4. Denmark

18,261

  • 8. Sweden

4,755

  • 12. Sweden

6,739

  • 7. Sweden

17,524

  • 10. Germany

4,685

  • 19. Germany

3,881

  • 14. Germany

16,558

  • 19. Austria

3,156

  • 20. Austria

3,706

  • 16. Austria

16,360

  • 21. Czech Rep.

2,882

  • 23. Czech Rep.

3,501

  • 28. Czech Rep.

8,768

Czech economy facts in brief 2015

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Source: Madison Project GDP per capita global ranking Source: Eurostat

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2015: A CENTRAL EUROPEAN TIGER ROARS

Czech economic growth in 2015 accelerated to a record and outpaced all other EU members in the first quarter, helped by a policy of keeping the currency weak and the government’s looser budget stance. According to the Czech Statistics Office the GDP rose by 3.9 percent from a year earlier, the fastest clip since the second quarter of 2008. “The current economic recovery stands on strong foundations, supported by growth in foreign markets, declining

  • il prices and domestic fiscal and monetary policy,” Jiří Skop, a senior economist of Komerční Banka said. (Bloomberg)

GDP growth % 2009 2010 2011 2012 2013 2014 2015* 2016*

Czech Republic

  • 4.70

2.14 1.97

  • 0.73
  • 0.71

1.99 3.10 2.48 Euro zone

  • 4.45

1.97 1.66

  • 0.81
  • 0.34

0.85 1.45 2.06 Hungary

  • 6.47

0.77 1.81

  • 1.80

1.66 3.60 2.96 2.24 Poland 2.63 3.70 4.76 1.76 1.73 3.44 3.51 3.70 Slovakia

  • 5.29

4.83 2.70 1.60 1.42 2.41 2.96 3.40

Source: OECD *Forecast

MASSIVE INVESTMENTS FROM WESTERN EUROPE

Since the early 1990s the Czech Republic has been one of the most successful transition economies in terms of attracting foreign direct investment; since 1993 almost EUR 84 billion in FDI has been recorded. The introduction of investment incentives in 1998 further stimulated a massive FDI inflow, both into greenfield and brownfield projects. The implementation of EU rules and regulations has also helped to improve the business environment and attract FDI. According to the Economist Intelligence Unit, the Czech Republichas consistently attracted a high rate of foreign direct investment per capita since 2000.

(CzechInvest)

EUROPEAN INVESTORS DOMINATE

  • 1. Netherlands

763,8

  • 2. Austria

373,7

  • 3. Germany

301,0

  • 4. Luxembourg

162,1

  • 5. France

152,3

  • 15. Sweden

31,3

  • 18. Denmark

16,8

  • 22. Finland

5,9

  • 24. Norway

3,0

STRONGEST FOCUS ON PRODUCTION

Manufacturing industry 32.2 Finance & Insurance 27.9 Warehouses & Retail 10.1 Real estate 6.8 ICT business 4.9 Private property sales 2.8 Technical field 1.8 Science & Research 1.7 Rest 6.7

LABOUR COSTS BELOW EU AVERAGE

According to the Czech Statistical Office (ČSÚ) the median monthly wage in the Czech Republic grew by CZK 515 to CZK 23,072 in 2014; the average monthly wage in 2014 reached CZK 25,686. Four out of five employees were earning gross wages between CZK 12,000 and CZK 42,000 a month. The highest wages in the long term are in the banking and insurance sectors, which are about twice the average of other sectors, but employees in information and communication technologies are catching up very fast. Czech labour costs in 2014 represented roughly one third of those in Denmark, Sweden and Finland and one fourth of Norway’s.

( ČTK/Eurostat)

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In CZK bill. Source: ČNB In %

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THE CZECH EXPORT LOCOMOTIVE

Czech economy is heavily focused on exports; in 2014 the value of goods and services sold abroad passed 80 percent of the country’s GDP. More than

  • ne third of Czech total exports goes to Germany. The value of exports to

Bavaria alone is higher than Czech exports to the USA, India, China and Russia

  • combined. No post-communist country is economically more closely linked to

Germany as the Czech Republic. According to Jan Bureš, economist in ČSOB bank, Czech e conomy is so interconnected with German economy that the country in reality constitutes a 17th Bundesland. “Any change in German investors’ mood is felt in Czech economy within two months,” he says. (LN)

SMALL BUT STEADY GROWTH IN WAGES

2007 2008 2009 2010 2011 2012 2013 2014 Czech Republic 2.71 3.72 2.47 0.11 0.56 2.53 0.49 1.37 Euro zone 1.46 3.77 4.46

  • 0.68

0.57 1.94 1.29 1.15 Hungary 5.79 4.63 2.73

  • 0.35

1.59 3.50 0.78 2.45 Poland 2.09 7.97 1.43 2.14 1.15 1.82 0.83

  • 1.92

Source: OECD

1/2005 9.6 1/2006 9.2 1/2007 7.9 1/2008 6.1 1/2009 6.8 1/2010 9.8 1/2011 9.7 1/2012 9.1 1/2013 8.0 1/2014 8.6 1/2015 7.7 5/2015 6.4

UNEMPLOYMENT FALLING...

TOP TEN EXPORT MARKETS (2014)

…BUT REGIONAL DIFFERENCES LARGE

May 2015 in % Source: ČSÚ

In CZK 1,000 In CZK 1,000

National average % Source: ČSÚ

NORDIC-CZECH TRADE & BUSINESS RELATIONS

The Nordic countries have come to play a far more significant role in Czech economy than their combined population would indicate. As a Czech export market the Nordic countries in 2014 overshadowed USA. A number of the around 400 Nordic companies currently established in the Czech Republic are market leaders in their sector, such as the IT industry (Tieto); furniture (IKEA); paper industry (Stora Enso); construction (Skanska); pharmaceuticals (Novo Nordisk) and seafood (Marine Harvest). In addition to Czech-Nordic partnership within the EU and NATO, the cooperation also has a vital security dimension: Sweden’s Saab is supplying Czech Air Force with Gripen jet fighters and Norway’s Statoil safeguards Czech energy independence through natural gas supplies. (Nordic News)

  • 1. Germany

1,158,693,487

  • 2. Slovakia

302,360,063

  • 3. Poland

215,635,904

  • 4. France

183,456,601

  • 5. United Kingdom

183,448,017

  • 15. Sweden

53,130,364

  • 19. Denmark

41,580,502

  • 22. Finland

19,106,838

  • 25. Norway

16,171,188

  • 83. Iceland

846,013

TOP TEN IMPORT ORIGINS(2014)

  • 1. Germany

830,073,002

  • 2. China

359,365,606

  • 3. Poland

245,157,946

  • 4. Slovakia

168,398,227

  • 5. Italy

129,754,605

  • 20. Sweden

27,887,899

  • 26. Denmark

19,912,966

  • 29. Norway

14,442,325

  • 35. Finland

10,363,547

  • 67. Iceland

1,300,972

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Source: ČSÚ

Year/year %

Prague Pilsen Central Bohemia Hradec Králové South Bohemia Pardubice Vysočina Zlín Liberec South Moravia Karlovy Vary Olomouc Moravia/Silesia Ústî nad Labem

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LARGEST NORDIC COMPANIES

Denmark Bang & Olufsen, Chr. Hansen, Coloplast, DSV Air & Sea, Fibertex, Flügger, Faerch Plast, ISS, Jabra, JYSK, Kompan, LEGO, Nilfisk, Novo Nordisk, Radiometer, Rockwool Finland Ensto, Cramo, KONE, Nokian Tyres, Hansa Česko, Huhtamäki, Metso Minerals, Orion Pharma, Pöyry Environment, Ramirent, Stora Enso, Tieto, Vacon, YIT Iceland Hamé (Nordic Partners), Key Hotels Group Norway City Self Storage, Jotun, Harding Safety, Hydro Aluminium, Icas, Isola Powertekk, Jackon, Jøtul, Marine Harvest, Scatec Solar, Orkla, Veritas GL, Wikov Gear, Yara, Sweden Alfa Laval, Atlas Copco, Electrolux, Ericsson, FlexLink, Getinge, Husqvarna, H&M, IKEA, Itab, Kin narps, Lindex, Llentab, Loomis, Lundbeck, Mondi Štětí, NCC, Oriflame, Saab, Sandvik,

GRIPEN OFFSET PROGRAM TRIGGERED EXPORTS

The Czech Republic from 2004 to 2014 gained CZK 31.6 billion thanks to the offset programme that was concluded in connection with the leasing of 14 Swedish Gripen jet fighters in 2004. According to the Czech-Swedish contract from 2004, the industrial cooperation was to bring 130 percent of the value of the agreement for the lease of the Gripens, or CZK 25.545 billion. Direct investments in the Czech defence, aerospace and security sectors represent 20 percent of the contract; the remaining indirect offsets are industrial cooperation and export opportunities for Czech companies. “The cooperation with our Swedish partners has been excellent from the very beginning,” Czech Defence Minister Martin Stropnický comments.

(ČTK)

ŠKODA SETS NORDIC SALES RECORD

2010 2011 2012 2013 2014 Denmark 7,900 8,100 10,400 14,600 14,500 Finland 9,300 10,300 8,700 8,500 9,200 Norway 6,500 7,400 6,700 6,800 7,400 Sweden 13,000 14,300 12,100 12,300 13,600 Total 36,700 40,100 37,900 42,200 44,700

In cars Source: Škoda Auto

BUSINESS ETHICS & TRANSPARENCY

Do Nordic investors perceive corruption as widespread in the Czech Republic? To sort out this question, the Nordic Chamber in 2011 conducted an anonymous survey among its own members and in the international business com- munity in the country. According to 33 percent of the respondents corruption is the single biggest obstacle to doing business in the Czech Republic; bureaucracy (19 percent), difficult access to financing (8 percent) and tax regulation (3 percent) came next. The Nordic businesspeople and their international colleagues believe corruption is rampant in the Czech public sector, especially in connection with tenders at the municipal level, but lawmakers too are regarded as a rather corrupt profession.

(Nordic News)

CORRUPTION STILL A PROBLEM...

2011 2012 2013 2014 Estonia 29 32 28 26 CzechRep. 57 54 57 53 Hungary 54 46 47 47 Poland 41 41 38 38 Slovakia 66 62 61 54

Global ranking Source: Transparency Int.

...BUT EASIER TO DO BUSINESS

2011 2012 2013 2014 Estonia 18 24 21 17 Czech Rep. 70 64 65 44 Hungary 46 51 57 54 Poland 59 62 55 32 Slovakia 43 48 46 37

Global ranking Source: World Bank

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ICT & INTERNET CONNECTIVITY

The Czechs have a reputation as Central Europe’s technical and engineering wizards. The country’s strong industrial tradition dates back to the 19th century, when Bohemia and Moravia were the economic heartland of the Austro-Hun- garian Empire. The Czech lands produced about 70 percent

  • f all industrial goods in the Empire, some of which became

almost iconic. The Czechs were also overrepresented in the Austro-Hungarian air force and submarine fleet, which needed technically skilled personnel. After the Velvet Revolution, the Czechs have demonstrated their talents for technical innovation by immediately catching up with the global ICT revolution. (Nordic News)

CZECH INTERNET SPEEDY

  • 1. South Korea

25.3 3.Japan 15.0 5.Sweden 14.1 9.Czech Rep. 12.3 11.Finland 11.7 15.Norway 11.4 17.Denmark 11.2 23.Hungary 8.8 25.Poland 8.6 26.Slovakia 8.6

Mbit/s Source: Akamai Tech.

MOBILE PHONES EVERYWHERE

Norway 96.1 Denmark 96.0 Finland 94.0 Sweden 89.1 Germany 86.7 Slovakia 82.6 Estonia 81.6 Czech Rep. 77.4 Hungary 74.3 Poland 67.1

Population % 2014 Source: ILS

EDUCATION & EQUAL OPPORTUNITIES

The Czech Republic performs well in many measures of well-being in OECD‘s Better Life Index. The country ranks above the average in personal security, education and skills, work-life balance and environmental quality, but below average in jobs and earnings, housing, health status, income and wealth, social connections, and civic engagement. Good education and skills are important requisites for finding a job. In the Czech Republic, 92 percent of adults aged 25-64 have completed upper secondary education, well above the OECD average of 75 percent and the highest ratein the OECD. In terms of education quality, the average student scored 500 in reading literacy, maths and science inthe OECD’s Programme for International Student Assessment. This score is slightly higher than the OECD average of497. On average, Czech girls outperformed boys by 9 points

(Nordic News)

CZECH WOMEN SEEK CAREERS...

Women Men

Sweden 76.8 81.9 Finland 72.5 75.5 Denmark 72.2 78.6 Germany 71.5 81.8 Austria 70.3 80.9 Czech Rep. 62.5 80.2 EU27 62.4 74.6 Poland 57.5 72.0 Slovakia 57.3 72.8 Hungary 56.4 68.1

Workforce % 2013 Source: Eurostat

…BUT NOT IN POLITICS

1.Rwanda 63,8 5.Sweden 43.6 9.Finland 41.5 12.Norway 39.6 15.Denmark 38.0 16.Germany 36.5 33.Austria 30,6 51.Poland 24.1 68.Czech Rep. 20.0 74.Slovakia 18.7 112.Hungary 10.1

Parliamentarians % 2015 Source: IPU

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TRANSPORTATION & INFRASTRUCTURE

Pilsen-based ŠKODA Transportation, a major producer of trams, trolleybuses and other transport vehicles, has a strong position not only in its domestic market, but also abroad. The company has been active in the Nordic countries for a number of years; it is currently participating in several public transportation tenders in the region. In 2004-2006, the Czech engineering company’s subsidiary ŠKODA Vagonka delivered 16 suburban train units to the Finnish Railways. The trains are specially designed to withstand Scandinavia’s tough climate conditions. Landskrona in Sweden is

  • perating trolley buses produced by another subsidiary, ŠKODA Electric. In October 2015 Škoda Transportation will

be present with a large stand at the Nordic Rail exhibition in Jönköping, Sweden.

2015: CZECH MOTORWAY NETWORK EXPANDING

Country Motorways Main Roads

  • Sec. Roads

Other Total Area km²

Austria 1,696 10,003 23,653 88,666 124,018 83,858 Czech Rep. 729 6,198 48,791 74,919 130,637 78,866 Denmark 1,130 2,707 69,737

  • 73,574

43,094 Finland 765 12,563 13,537 51,295 78,160 338,145 Germany 12,813 39,887 178,269 178,269 644,258 357,168 Hungary 1,273 6,802 23,303 166,142 197,520 93,030 Poland 849 17,928 28,403 221,826 269,006 312,685 Slovakia 391 3,496 14,050 25,942 43,879 49,036 Sweden 1,891 13,462 83,131 122,378 220,862 449,964

In km end 2009 Source: EU Road Federation

LIVING & WORKING IN THE CZECH REPUBLIC

Foreigners who come to work in the Czech Republic are often surprised by the rich offer of leisure activities in this Central European country. Bohemia and Moravia have a glorious countryside crisscrossed with thousands of kilometres

  • f hiking tracks, an incredible number of cultural sites, picturesque historical towns and renowned spas where people

come for treatment and to relax. If experiencing the nation’s colourful past is not for you, there are plenty of other places to spend your leisure time – from modern sport centres and golf courses to cinemas, theatres and concert

  • halls. Czech cuisine has much more to offer than just beer, and the capital Prague is frequently ranked among the

world’s most beautiful cities.

(CzechInvest)

RAPIDLY CATCHING UP WITH WESTERN EUROPE

Country Purchasing Power Index Safety Index Healthcare Index Consumer Price Index Property Price to Wages Ratio Pollution Index

  • 2. Denmark

164.26 74.97 82.44 88.31 5.18 31.15

  • 4. Finland

149.42 73.43 75.19 76.89 6.78 17.44

  • 5. Sweden

156.16 57.05 75.17 73.86 8.40 18.63

  • 11. Austria

135.34 73.72 76.49 68.14 9.36 32.45

  • 24. Czech Rep.

98.81 67.75 67.73 42.69 9.87 42.66

  • 28. Poland

90.97 67.69 58.44 39.62 9.91 49.43

  • 31. Slovakia

77.09 67.23 56.76 45.13 8.78 44.54

  • 37. Hungary

66.35 56.70 50.02 41.75 7.98 45.70

In 2015 Source: Numbeo

www.nordicchamber.cz 6

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NORDIC chamber of commerce in the czech republic

Václavské náměstí 51 110 00 | Praha 1 Www.nordicchamber.cz +420 774 123 370 info@nordicchamber.cz