Ukraine’s January Industrial Output Down 3.3% YoY

March 04, 2019
 

News
Ukraine’s industrial production fell by 3.3% YoY in January, representing a second straight month of notable decline following December’s 3.6% YoY drop, the State Statistics Committee (UkrStat) reported last week. There was also a month-on-month unadjusted drop of 13.8% in January’s industrial index as a result of the New Year holiday season. As has already been reported, Ukraine’s overall industrial production for full-year 2018 showed a rise of 1.1%.


Commentary
The 2-month trend of more than 3% year-on-year declines in industrial output looks concerning; the next couple of months’ data will tell whether this might simply be a statistical anomaly. Output in the manufacturing sector fell 5.5% YoY in January, with the largest drop of 66% YoY reported in the electricity equipment production, which we view as some kind of one-off event. The food sector also saw an output decline of 1.9% YoY during the month. The utility sector output increased by 1.3% YoY while the extraction sector’s production index declined by 1.4% YoY on lower iron ore extraction (-7.1% YoY). Meanwhile, extraction of coal rose by 16.2% YoY in the period and oil&gas output increased by 4.3% YoY.
For now, despite the weak start to 2019, we are leaving our full-year Ukraine industrial output forecast at growth of 2.1%, based on expected gains in the steel and chemical sectors on the back of the quite strong global economy.
In other key economic statistics, UkrStat reported that retail sales volumes rose by 6.3% YoY in January, continuing the impressive pace that the retail sector has enjoyed for the last 3 years. The construction sector was also in good shape, seeing growth in activity measured by the index of 6.2% YoY in the first month of the year.


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