Industrial Production Rises 1.4% YoY in October, 1.8% in 10M18

December 03, 2018
 

Ukraine’s nationwide industrial production rose 1.4% YoY in October after declining by 1.3% YoY in September, according to data from the State Statistics Committee released in mid-November. In the extraction sector, the output increase was 5.2% YoY in October after a rise of 0.7% YoY in September. The manufacturing sector index grew by 1.0% and the utility sector had a drop in output of 3.6% YoY in October, extending its downward trend this year. Year-to-date through October, the overall industrial output in Ukraine is up by 1.8% compared to 10M17.


Commentary
The main takeaway after October’s data is that the Ukrainian economy remains on the expected growth path despite the pause seen in September. The 1.8% YoY rise in the industrial index through 10M18 is not far off from our base case forecast of full-year industrial growth at 2.2% YoY. In October alone, we were pleased to see that the country’s natural gas extraction increased by 3.7% YoY to 1.8bn cubic meters. Meanwhile, the output drop in the utility sector - which mainly reflects electricity usage - can be taken as a positive sign that Ukrainian industry is becoming more energy efficient.
In the individual sub-sectors which form the manufacturing output index, the steel production index edged down by 1.2% YoY in October, the machinery sub-sector’s output shed 0.3% YoY, and oil processing rose by 5.4% YoY in volume. Over 10M18, the machinery sector output increased by 1.6% YoY.      
In other macroeconomic data, UkrStat said the government’s agricultural production index rose 9.0% YoY over the 10M18 period, the construction index rose 6.4% YoY (5.8% YoY in October alone), and retail sales are up by a solid 5.4% YoY.


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