Ukraine industrial output falls 5.1% y/y in January

Ukraine industrial output falls 5.1% y/y in January
Ukraine's economy is off to a poor start to 2020 with industrial production down 5.1% y/y in January even before the worst of the coronavirus fears hit confidence
By bne IntelliNews February 28, 2020

Ukraine's industrial output fell 5.1% year-on-year in January after sliding 7.7% y/y in December, the nation's state statistics service Ukrstat reported on February 26.

Seasonally adjusted output inched up 1.2% m/m.

Manufacturing output shrank 3.2% y/y in January (after a 5.4% y/y decline in December). In particular, machinery production dropped 10.5% y/y (after a 14.5% y/y decline in December). Metallurgy output dropped 10.3% y/y (vs. a 10.0% y/y decline in December). Meanwhile, food production increased 2.9% y/y (vs. a 2.4% y/y decline in December) and the chemical industry surged 24.4% y/y (after an 8.7% y/y increase in December).

Mining output fell 4.5% y/y in January, after plummeting 8.5% y/y December. In particular, coal production dropped 19.2% y/y, oil and natural gas production slid 3.0% y/y, and iron ore output fell 1.5% y/y. The supply of electricity and natural gas slid 11.8% y/y in January after a 15.7% y/y drop in December.

Evgeniya Akhtyrko at Kyiv-based consultancy Concorde Capital believes that the decline in Ukraine’s industry slowed in January. "The renewed growth in food production and accelerated growth in chemical industry were not enough to stop the decline in manufacturing where the drop in metallurgy and machinery remained almost as strong as in December," she added in a note on February 27.

"The decline in coal mining and supply of electricity and natural gas is fostered by abnormally warm weather in Ukraine," Akhtyrko wrote, adding that the decline in Ukraine’s industry is likely the extend through most of the first half of the year as we do not see the factors which would prompt a faster recovery.

Concorde expects Ukraine’s industrial output to increase 1% y/y in 2020 (vs. a 1.8% y/y decline in 2019).