Forging Industry showing positive trends

Stable economy, relatively low production cost and ongoing demand from the automotive industry have contributed to the positive trend in the Czech forging industry over the last year. But the pressure is building up with soaring scrap prices and unions demanding wage increase.

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Industrial sales in 2003 have increased 4-5% year-on-year at constant prices (2000 average prices). Average unemployment was more than 10% at the end of 2003. Interannual inflation index is going up slowly, and at the end of year was from 1 to 1,5% (during 2003 was low deflation first half a year).

2. Drop forging industry:

There was relatively good trend in forging deliveries during the year 2003.
Labor cost increased and steel cost as well during last quarter of the year 2003. We chronicle the continuous request for price reduction and/or additional services. That all means the profitability on the same level like year before.

There was very low inflation rate during first half of the year 2003 but thanks to labor and/or material cost increases in second part of 2003 is now on level 1-1,5%.

Steel list prices go up at the end of year and (the scrap surcharge in the similar level). Now is very bad forecast from our material suppliers - roughly more from 10 to 21% during the first half of this year.

3 .Market sectors:

Forging demand from the Automotive Sector will increased especially in the second half of the year 2003 and we wait similar development this year.

4. Others factors affecting the industry:

Trade Unions pressure on the line to increase the wage level - but especially in the national sector. Private sector hold labor cost at the same level the whole year 2003.

With special thanks to:

Mr. Jiri Kolarsky

Czech Republic Forge Association
Svazkovaren
Vídeòská 127 619 00 BRNO
Telefon: +420 547 135 339
Fax: +420 547 135 330