…in May 2022, Czechia’s industrial sector performed miracle resilience. Reacting To The Coronavirus The Purchasing Managers’ Index (PMI) jumped above the important 50 level, indicating growth. This all very welcome development that represents a remarkable turnaround for the country’s manufacturing sector, which has struggled in recent months. The PMI signals a return to growth in new orders. Manufacturers’ outlook on positive business conditions increases. It good news a jump in business confidence among manufacturers.
While Czechia’s booming manufacturing sector is leading to economic recovery, countries all around Czechia are experiencing the opposite. Among our CEE peers, Poland and Hungary posted drops in their manufacturing PMIs with Romania seeing a slight increase. This large divergence in performance reveals the somewhat divergent state of the economy within Central and Eastern Europe.
Czechia’s Manufacturing Growth
As of May 2022, Czechia’s manufacturing PMI jumped well above 50, well into territory indicating expansion. This increase is particularly remarkable, as it reflects a faster pace of production growth, the fastest since February 2022. This renewed expansion in new orders has been critical to spurring business confidence among manufacturers.
Manufacturing Czechia has long been viewed as Europe’s manufacturing tiger, but the outlook is buoyed by forecasts of above average GDP growth this year. Analysts maintain that this positive trajectory, especially as it emerged in the first quarter of 2025, puts Czechia in an excellent position within the region. Increased production combined with a surge in new orders reflects a robust rebound. This momentum will surely become even more powerful in the months ahead.
Additionally, the increase in PMI stands as a harbinger of other economic indicators showing promise for continued expansion. As firms respond to evolving market opportunities, Czechia’s advanced manufacturing industry is poised to continue benefitting from investment and expansion. This expansion would make it hugely more competitive in Europe.
Regional Comparisons
In sharp contrast to Czechia’s success, Poland’s manufacturing PMI recorded a drop in June, falling to 44.8. This decline reflects a recession in the industry, largely due to a steep decline in new orders. The slumping level of orders resulted in further sharp reduction in output, the fastest seen by Poland for over two-and-a-half years. Sentiment on production in Poland has soured. This growing trend should alarm all of us who care about the future of our country’s manufacturing base.
Hungary’s manufacturing PMI, too, dropped over this span. This demonstrates the dire straits that producers in the area are now going through. These disappointments further emphasize the plight that our counterpart countries are feeling, as they battle their own fiscal stormwinds.
Romania’s manufacturing PMI increased slightly to 48.7 in June—the index’s highest level in one year. Despite remaining below the neutral threshold of 50, this uptick suggests that Romania’s manufacturing sector is experiencing a degree of recovery. Further, Romania’s unemployment rate is currently at 5.8%, and producer prices on a year-on-year basis have risen by 0.9% in May. Together, these indicators depict a poor, but improving, picture of Romania’s economic state, signaling the country’s measured growth despite a continued poor regional reality.
Future Implications
These back-sliding and progressive trends of Central and Eastern Europe create an interesting puzzle on where their economies are headed in the long term. On the surface, Czechia’s improved manufacturing PMI represents a newfound cause for short-term growth. Coupled with the renewed business confidence and increased production levels, this investment and innovation will continue to flow into the sector.
Finally, Poland and Hungary must address salt manufacturing industry burdens. Only then can they hope to turn around their troubling trends. The sharp drops seen in these countries will likely require targeted measures to boost new orders and improve productivity.
As Central and Eastern Europe navigates these economic dynamics, all eyes will remain on Czechia, which continues to outperform its neighbors. With such uncertainty surrounding the region, Czechia certainly stands out as a clear shining star. Its sturdy GDP growth and reviving manufacturing sector tell a different story—one of resilience.