Development of the glass and ceramic industry in the period from 2003 to 2008Homepage / Annual Report / Annual Report 2008 / Development of the glass and ceramic industry in the period from 2003 to 2008
In this part of the Annual Report characteristic values of the main production indices of the glass and ceramic industry of the Czech Republic in 2008 and in the period from 2003 till 2008 are recorded. In the context of real outer and inner background of the Czech Republic, based on these data, the aim is to analyze and describe the main trends of the development of economic and production indices of the glass and ceramic industry in above-mentioned years.
In the introduction of the glass and ceramic industry development analysis a survey of basic macroeconomic indices for the Czech Republic in the investigated period from 2003 till 2008 is given for understanding wide relations.
|Gross domestic product (GDP)||Average growth in %, current prices||3.6||4.5||6.3||6.8||6.6||3.0|
|Average rate of inflation||Average growth in %||0.1||2.8||1.9||2.5||2.8||6.3|
|Unemployment rate||Average growth in %||9.9||9.2||9.0||8.1||6.6||5.5|
|Growth of average wages||in %||6.5||3.7||3.2||3.9||4.4||2.0|
|Balance of trade||bill CZK||-69.4||-26.4||41.9||39.8||86.1||69.4|
|CZK / EUR||Average per year||31.8||31.9||29.8||28.3||27.8||24.9|
|CZK / USD||Average per year||28.2||25.7||24.0||22.6||20.3||17.0|
(Czech Statistical Office - June 2009)
Main macroeconomic indices in the Czech Republic in the period from 2003 till 2008
The economic growth rate of the Czech Republic in 2008 significantly slowed down in comparison with previous years. The main cause was a decline of demand in the second half of the year, especially, in countries of West Europe. The glass and ceramic industry was significantly marked by this development, not only because of its export orientation, but also because of its dependence on a number of following industrial branches utilizing its products.
Data and analyses given below were gathered and processed for the glass and ceramic industry as the area of the Czech processing industry corresponding to the characteristic orientation of companies associated in the Association. The selected description method of the industrial development comes out from investigation of data arranged in individual branches of the glass and ceramic industry. For the analysis of 2008 available statistical data relevant to 15 July 2009 taken from the Czech Statistical Office (hereinafter Statistical Office), have been used.
In 2008 the Statistical Office changed the methodology of showing the individual branches production in weight units. The production is not stated consistently in tonnes, but for instance in m2, pieces, kg, etc. Therefore, in comparison with previous reports, information about the production in weight units in individual production branches is not given in this report.
In years 2003 and 2004 data were stated in the household and technical china and the technical ceramics and sanitary ware groups. Since 2005 data are given in the household china and ceramics and the technical ceramics and sanitary ware groups. Technical china is a part of technical ceramics.
Price indices for the group of products of the glass and ceramic industry
According to the Statistical Office data, the following trends of the price indices development are given in accordance to the classification CZ-CPA valid since 2008, substituting the Standard Classification of the Production (hereinafter Standard Classification):
|DI 26||CG 23||Other non-metallic mineral products|
|DI 261||CG 231||Glass and glass products|
|DI 262||CG 232||Refractory products|
|CG 234||Other china and ceramic products|
Inter - year price indices (same period of previous year = 100 %)
Cumulative price indicies (2002 = 100 %)
A total average price index for the Glass and glass products group (CG 231) in 2008 decreased by 1.9 %, the price indices increased in the Refractory products group (CG 232) by 3.3 % and the Other china and ceramic products group (CG 234) by 5.5 % comparing with 2007.
Revenues for sale of own products and services
|Household china and ceramics||3.37||2.83||2.63||2.34||2.90||2.66||91.7|
|Technical ceramics and sanitary ware||2.89||3.67||3.00||3.86||3.59||4.12||114.8|
|Glass and ceramics total||51.68||49.11||49.31||49.55||52.67||49.81||94.6|
Revenues for sale of own products and services (bill. CZK)
Development of revenues for sale of own products and services (bill. CZK)
In comparison with the previous year the revenues for sale of own products and services decreased totally by 5.4 % (2.86 bill. CZK).
The revenues amount for the flat glass in 2008 (in comparison with 2007) increased by 2.3 %. The growth of the flat glass production is dependent on the development in the building and automotive industry. The building production in 2008 increased, expressed in CZK, only by 0.6 %, comparing with 2007. A collapse of the demand from abroad struck, especially, the automotive industry. Due to the demand decrease the competitiveness escalated, and consequently the prices declined. Also the influence of a strong CZK was not negligible. The revenues for the flat glass include the revenues for the unfinished flat glass (raw unfinished glass) and the finished flat glass (finished glass, safety glasses, insulating glasses, mirrors, etc.). The revenues for the unfinished flat glass were approximately 52.8 % of the revenues for the flat glass, i.e. 9.59 bill. CZK, in 2008. In comparison with 2007 they increased by 3 %. The revenues for the flat glass products increased by 9.0 % (in 2008 they were approx. 47.2 % of the revenues for the flat glass, i.e. 8.58 bill. CZK).
In comparison with 2007, the revenues for the container glass decreased by 10.5 %. This decrease strongly influenced the export decline of this assortment. Nevertheless, the sale on inland market decreased too.
In comparison with 2007, the revenues of the other glass decreased by 10.1 %. Continually decreasing demand from abroad for fashion jewellery and glass semiproducts for fashion jewellery (the share of jewellery glass in the other glass group is about 53 %), has a decisive share on the revenues decrease for this group. The export decreased by 36 %, i.e. by 2.97 bill. CZK in comparison with 2007.
The revenues of the glass fibres decreased by 19 %. The decrease was influenced by a strong CZK, by continually stronger competitiveness of cheap products from China and by a crisis in the building industry in the second half of the year.
Worsening economic conditions (strong CZK exchange rate, competition of cheap goods from the third countries, economic recession) projected very significantly to the development of revenues for the utility glass and household china. In 2008 Crystalex, a.s. (production of utility soda potassium glass), Sklárny Bohemia, a.s. and Sklo Bohemia, a.s. (production of utility lead glass) and Karlovarský porcelán, a.s. and Concordia, a.s. (production of household china), shut down their activities. The revenues for the utility glass decreased by 13.3 % and the household china by 8.3 % in comparison with 2007.
In the technical ceramics and sanitary ware the revenues in 2008 increased by 14.8 % in comparison with 2007. Comparing the development in 2007, the revenues increased significantly in the sanitary ware (they represent 58.2 % of the production in this group), i.e. by 33.0 % (from 1.80 bill. CZK in 2007 to 2.39 bill. CZK in 2008). The revenues increased also in the technical ceramics.
|Flat glass||3 791||3 878||4 134||4 151||4 683||5 175||110.5|
|Container glass||1 486||1 347||1 283||1 233||1 198||1 150||96.0|
|Other glass||14 421||12 226||13 182||13 364||12 865||10 206||79.3|
|Glass fibres||1 470||1 450||1 559||1 561||1 670||1 529||91.6|
|Utility glass||11 050||9 540||8 635||7 436||6 911||6 020||87.1|
|Glass total||32 218||28 441||28 793||27 745||27 327||24 080||88.1|
|Houusehold china and ceramics||6 218||5 153||4 908||4 234||4 136||3 749||90.6|
|Technical ceramics and sanitary ware||2 373||3 140||3 124||3 215||2 917||3 411||116.9|
|Ceramics total||8 591||8 293||8 032||7 449||7 053||7 160||101.5|
|Glass and ceramics total||40 809||36 734||36 825||35 194||34 380||31 240||90.9|
Average accounting number of workers (persons)
Development of average accounting number of workers (persons)
Total workers number in the glass and ceramic industry stated in 2008 in comparison with the previous year, decreased by 3140 persons (9.1 %). In all other production groups the workers number decreased, with the exception of the flat glass and the technical ceramics and sanitary ware.
The growth of the workers number by 492 in the flat glass influenced the growth of 590 workers in the productions processing the flat glass (e.g. double insulating units, etc.). On the contrary, in the production of the unfinished flat glass the workers number decreased by 98 persons.
Since 2003 the workers number in the container glass group permanently decreases. The decreasing workers number is a result of continually proceeding rationalization measures. The workers number decreased by 4.0 % between years 2008 and 2007.
The workers number in the utility glass decreased by 12.9 % and in the household china by 9.4 % between years 2008 and 2007. Unfavourable outer conditions of sale causing measures followed by the decrease of the workers number and culminated in the third quarter of 2008 by a shut-down of Crystalex, a.s., Sklárny Bohemia, a.s., Sklo Bohemia, a.s., Karlovarský porcelán, a.s. and Concordia, a.s., still had an influence on the decrease of the workers number in the utility glass (by 891 persons) and the household china (by 387 persons).
The decrease of the workers number in the production of glass semiproducts for fashion jewellery and glass jewellery is sharing decisively on the decrease of the workers number in the other glass by 2659 persons (by 20.7 %). In this group the volume of orders decreases in the last years, what is the cause of production limits with the consequence of redundancy of employees.
In the technical ceramics and sanitary ware the workers number increased by 494 persons. The workers number increased both in the technical ceramics, and in the sanitary ware.
|Flat glass||22 256||23 029||23 980||25 406||26 785||27 271||101.8|
|Container glass||20 999||21 855||22 609||23 028||25 035||26 875||107.3|
|Other glass||14 463||15 554||16 014||17 043||17 798||19 745||110.9|
|Glass fibres||26 616||28 133||27 603||28 734||29 196||31 351||107.4|
|Utility glass||14 744||14 028||14 195||14 702||15 736||17 120||108.8|
|Household china and ceramics||11 412||11 743||11 958||13 058||14 177||14 650||103.3|
|Technical ceramics and sanitary ware||18 565||17 977||18 589||19 496||21 314||21 472||100.7|
|Glass and ceramics total||15 712||16 347||16 880||18 008||19 276||20 794||107.9|
Average month-wages (CZK)
Development of average month-wages (CZK)
A noticeable tendency in differentiation of wages among groups with mass and full automatized productions (e.g. flat glass, glass fibres and container glass) and groups with more often changes (shorter production series) in the regime of automatized production lines and a certain share of manual production, is continuing. Average wages reached in the glass fibres and flat and container glass are high above the average of the Czech Republic (23,542 CZK). Below the level of the average wage in the Czech Republic is the average wage reached in the technical ceramics and sanitary ware, where the average wage in technical ceramics is 18,243 CZK and in sanitary ware 24,629 CZK. The height of the average wage in the other glass is influenced by strengthening of more qualified work share (a group of the technical glass productions) on one side, and low wages in the production of glass semiproducts for fashion jewellery on the other side. Due to the unpleasant situation of these groups, the average wages in utility glass and household china stay deeply below the average wage in the Czech Republic.
The growth of average wages reached in 2008 in the whole glass and ceramic industry exceeded inflation by 1.6 of a percentual point.
Productivity of labour from sales in current prices
|Flat glass||3 764||3 965||3 835||3 851||3 791||3 511||92.6|
|Container glass||2 799||3 456||3 866||3 850||4 041||3 765||93.2|
|Other glass||896||898||1 011||951||963||1 092||113.4|
|Glass fibres||2 825||3 318||2 710||2 905||3 246||2 837||87.4|
|Household china and ceramics||524||550||537||553||701||709||101.1|
|Technical ceramics and sanitary ware||1 218||1 170||959||1 201||1 233||1 208||98.0|
|Glass and ceramics total||1 189||1 337||1 339||1 408||1 532||1 595||104.1|
Productivity of labour from sales in current prices (ths. CZK/worker)
Development of productivity of labour from sales in current prices (ths. CZK/worker)
All above-mentioned conclusions (revenues amount, workers number decrease, and production character) are projected in more complex index of the productivity of labour from sales. The productivity of the glass and ceramic industry as a whole increased by 4.1 % in comparison with previous year. In comparison with the increase between the years 2007 and 2006 it is by 4.7 of a percentual point less. The value 1565 ths. CZK per employee in 2008 is the highest from the investigated development line.
Excepting the other glass the productivity of labour in other production groups declined or stagnated in comparison with 2007.
The group of technical glasses, where the productivity is markedly higher than the productivity of glass semiproducts for fashion jewellery and glass jewellery production (the production share decreased from 60 % in 2007 to 53 % in 2008), influenced the high inter-year growth of productivity in the other glass (13.4 %) more than in previous years.
A greater growth of the workers number between 2008 and 2007 (by 20.3 %) than revenues (by 9.0 %) projected to the decrease of the productivity of labour in the flat glass (by 7.4 %) in the production of flat glass shaping and processing. The inter-year revenues decrease in other production groups was greater than the workers number decrease.
In the absolute amount of this index the highest productivity is in the container glass, flat glass and glass fibres. The lowest productivity was reached in the utility glass and in the household china and ceramics.
In the glass and ceramic industry as the whole the inter-year growth of productivity was by 3.8 of a percentual point lower than the growth of average wages.
|Household china and ceramics||3.085||2.780||2.957||2.932||3.708||3.512||94.7|
|Technical ceramics and sanitary ware||1.874||2.531||2.206||2.261||2.358||2.087||88.5|
|Glass and ceramics total||41.967||46.786||48.539||49.396||50.558||43.773||86.6|
Export (bill. CZK)
Export development (bill. CZK)
The glass and ceramic industry of the Czech Republic is oriented to export.
The total export of investigated groups was 43.773 bill. CZK in 2008. It decreased by 13.4 % (6.785 bill. CZK) in comparison with the previous year. The export decreased in all production groups.
The CZK strengthening against the EUR (average 10.4 % in comparison with 2007) and also against the USD (average 16.3 % in comparison with 2007), decrease of orders and continually strengthening competition of cheaper products projected to the export of individual production groups in various extent.
|Household china and ceramics||1.149||1.011||1.413||1.311||1.394||1.316||94.4|
|Technical ceramics and sanitary ware||1.478||1.578||1.092||1.000||1.240||1.104||89.0|
|Glass and ceramics total||15.754||18.304||17.457||18.269||19.321||17.577||91.0|
Import (bill. CZK)
Import development (bill. CZK)
The total import of the glass and ceramic industry products decreased by 9 % (1.744 bill. CZK) in comparison with previous year. From other production groups only the import of container and utility glass increased.
The development of the utility glass import documents permanent penetrating of competitors with cheap products of this assortment to the inland market.
The strategy of the transnational companies controlling the container glass in the Czech Republic probably projects to the increase of this production group import.
The decrease of the products of other production groups documents the development of economic situation in the Czech Republic in 2008.
Balance of foreign trade
|Household china and ceramics||1.936||1.769||1.544||1.621||2.314||2.196||94.9|
|Technical ceramics and sanitary ware||0.396||0.953||1.114||1.261||1.118||0.983||87.9|
|Glass and ceramics total||26.213||28.482||31.081||31.127||31.237||26.196||83.9|
Balance of foreign trade (bill. CZK)
Development of balance of foreign trade (bill. CZK)
Structure of balance of foreign trade
The groups of the glass and ceramic industry in the investigated period from 2003 till 2008 always very notably contributed to the active balance of foreign trade of the whole processing industry of the Czech Republic (see the Chapter “Position of the glass and ceramic industry in the Czech Republic”). The values of the balance of foreign trade confirm a significant export orientation of this industry. The balance of foreign trade was 26.196 bill. CZK in 2008 (decrease by 16.1 % in comparison with 2007). This value did not reach even the level of 2003. The export decreased faster (by 13.4 %) than import (by 9 %) in comparison with previous year. The groups of the other, utility and flat glass had the most significant share on the balance of foreign trade in 2008.
Effective home demand
The effective home demand index is defined by the formula: (The revenues from industrial activities + Import – Export)
|Household china and ceramics||1.43||1.05||1.07||0.76||0.53||0.65||122.6|
|Technical ceramics and sanitary ware||2.49||2.71||1.86||2.57||2.45||3.12||127.3|
|Glass and ceramics total||25.47||20.02||16.22||17.48||20.47||22.80||111.4|
Effective home demand (bill. CZK)
Development of effective home demand (bill. CZK)
The development of the effective home demand in individual groups of the glass and ceramic industry is differentiated and specific.
The prediction of the Ministry of Finance comes out from an assumption that no other significant negative events on financial markets will occur, however, there are expected continuation of problems of real economy in global scale till 2010 with slight manifestation of improvement. All countries which are important commercial partners of the Czech Republic (excepting Poland) are in recession.
The following comments to the prospects of the Czech economy position and prediction to years 2009 and 2010 were processed from data of the Ministry of Finance from June 2009.
|Gross domestic product (GDP)||Average growth in %, current prices||-4.3||0.3|
|Average rate of inflation||Average growth in %||1.1||1.1|
|Unemployment rate||Average in %||6.8||8.5|
|Growth of average wages||in %||3.4||3.3|
|CZK / EUR||Average per year||26.8||25.5|
|CZK / USD||Average per year||20.0||19.5|
(Ministry of Finance - June 2009)
Prediction of the development of main macroeconomic indices
The economic crisis exhaustively affected the inland economy in the 4th quarter of 2008. The economy collapse accelerated in the 1st quarter of 2009. The prosperity indices of home and foreign economy show indications of decline deceleration. The Ministry of Finance expects stoppage of economic decline in the 2nd half of 2009 already. The economy should be stabilized on the present low level and the slight stimulation should appear within the year 2010.
The movement of market interest rates will be in 2009 henceforth influenced by relatively high risk. Slow stimulation of economy which is expected by the Ministry of Finance in the 2nd half of 2010 and the effort of the Czech National Bank to return the inflation to 2 % in the end of 2010 will be accompanied by gradual growth of market interest rates.
Weakening of the CZK exchange rate against the EUR in 2009 could help the exporters to face up better to the decline of foreign demand.
In comparison with previous years a significant increase of energy prices is not expected.
The glass and ceramic industry is very endangered by this economic development, not only because of its export orientation, but also because of its dependence on a number of following industrial branches utilizing its products. All groups of the glass and ceramic industry have to face up to impacts of economic crisis and permanently strengthening competition. The glass and ceramic industry has to search ways how to orientate to the production with a high added value, how to strengthen the innovation in the production and in the management and commercial strategies.