Ukraine industrial output slows to 1.6% yoy growth in May

Ukraine’s industrial output increased 1.6% yoy in May,
slowing from 5.2% yoy in April, due to weaker growth in manufacturing, the
State Statistics Service reported on June 24. Seasonally adjusted output declined
0.9% m/m. In 5M19, industrial output climbed 0.9% yoy.

Manufacturing output inched up 0.7% yoy in May (after
7.4% yoy growth in April). In particular, machinery output declined 5.0% yoy
(vs. a 10.8% yoy surge in April). In addition, metallurgy growth slowed to 6.5%
yoy (from 9.9% yoy in April), and food production slowed to 3.7% yoy (vs. 6.6%
yoy growth in March).

Mining output increased 4.6% yoy in May (vs 2.7% yoy
growth in April). In particular, coal production increased 6.8% yoy. The supply
of electricity and natural gas dropped 0.3% yoy in May.

Regionally, growth was strongest in the Vinnytsia
(27.8% yoy), Sumy (23.6% yoy) and Chernivtsi (18.9% yoy) regions. Declines were
steepest in the Ukraine-controlled Luhansk (-15.0% yoy), Zhytomyr (-14.2% yoy)
and Khmelnytskiy (-7.0% yoy) regions.

Evgeniya Akhtyrko: This
performance is discouraging, as industry failed even to demonstrate its
traditional month-to-month growth in May. The swings in production of the
machinery sector prevented achieving consistent growth in manufacturing.

We expect industrial output to increase 2.0% yoy in
2019 (vs. 1.6% yoy growth in 2018).