The state poured money into the people to wipe out the traces of the real crisis. The economy just won’t get away with it


But when we look at the data from more detail, it is not so famous. It turns out that the industry in general is growing, but its flagship is declining. And probably not just once. Car production fell by 0.8%. The problem is not that car manufacturers have no one to sell to anyone and that there is no interest in their products, but that they are not production components and therefore cannot be produced. This is a completely atypical situation.

The latest data from retail shows that the customer wants the car. Adjusted for calendar effects, car sales grew by 4.4%. That’s decent. Retail trade as a whole is growing by 5.5%. In other words, cars are sold like most other goods. Theoretically, there is nothing to dwell on.

The atypical situation is illustrated by data from the labor market. Anyone who would expect that after last year’s sharp economic downturn there are no places and people are fighting for work, would be wrong. Thus, politicians have managed to turn the economy upside down thanks to various Antivirus-type aids. Instead of going through a classic demand crisis, we are going through a supply crisis.

At the end of August, the Labor Office registered 11,189 fewer jobseekers than at the end of August of the previous year. The share of unemployed persons was only 3.6%. A year ago it was at 3.8%. At the same time, employers are looking for more people than last year. There are 22 thousand more vacancies than a year ago. On average, there are only 0.7 job seekers per vacancy in the Czech Republic. Therefore, the employer cannot choose between job seekers. One can admire that. But be careful here! 74% of these vacancies are intended for people with basic education. This is nothing to rejoice at. Most vacancies are likely to disappear when the cost of robotics falls.

According to data published at the beginning of the week, the situation is also interesting in the construction industry. In July, construction output grew by only 0.5% year on year in real terms. However, the number of started dwellings started in July 2021 increased by 30.2% year-on-year. It just shows how hungry the real estate market is for new apartments even at record prices. The speculators went crazy.

In short, the world could have had a normal demand crisis, with people temporarily losing their jobs, cutting purchases, the economy collapsing and then rebounding. Instead, we managed to produce a supply crisis. Customers want to shop, but it doesn’t work. The carmakers accumulate unfinished cars on record-sized areas and are waiting for components. A short-term problem thus becomes a long-term one. Manufacturers have a problem not only with a lack of components, but also with people.

However, if we have to choose between temporarily high unemployment and long-term problems in the industry, I understand that politicians have preferred to write off part of the industry. However, the fact that unemployment has remained low even in times of crisis is not free. European states have paid billions for this. Everyone’s debt has jumped out and no one knows how to pay it off. In the end, then, we are all well, only the finance ministers have a problem, so that it still seems that everything is fine and that the record debts of governments are not really of interest to anyone.

Central bankers also have wrinkles on their foreheads. They, on the other hand, have to pretend that they are not at all nervous about where real estate prices, rents and everything related to it have jumped. But it makes me nervous, because none of what we see today is normal. By raising new money, politicians have covered up long-term problems that will not go away. They’re just deep under the rug.

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