Ukraine industrial output jumps 3.6% in January

Ukraine’s industrial output surged 3.6% yoy in January
after a reported decline of 0.5% yoy in December, the State Statistice Service
reported on Feb. 23. Manufacturing accelerated to 9.7% yoy growth (from 4.4%
yoy in December), pushing the overall result into the black. The decline slowed
to 0.2% yoy in mining (from 4.4% yoy) and to 8.1% yoy in utility (from 13.3%
yoy fall in December).

The impressive manufacturing result was mostly due to
machinery (22.1% yoy growth vs. 14.6% yoy in December), metallurgy (7.9% vs.
3.4% yoy in December), chemicals (55.9% yoy vs. 41.1% yoy in December), and
food (2.9% vs. 4.0% yoy in December).

Regionally, the Ukrainian-controlled part of Luhansk (-62.0%
yoy) and Donetsk (-9.1% yoy) continued to decline most, followed by by
Khmelnytsk (-5.3% yoy). Growth was the strongest in Lviv (18.1% yoy), Mykolayiv
(16.5% yoy)  and Chernivtsi (16.1% yoy).

In related news, Ukraine’s 2017 industrial indicators were
significantly revised by the State Statistics Service, which reported the new
figures on Feb. 23. Overall 2017 output rose 0.4% yoy instead of declining 0.1%
yoy, as the service had reported in January.

The revised data also showed that after the output
plunge in February-May 2017 caused by the government’s trade blockade with
occupied Donbas, the recovery was in better shape in the following months than
had been previously reported, showing year-to-date growth each month from June
to December, on a yoy basis. For example, output grew 0.3% yoy in 1H17,
compared to a 0.4% yoy decline as previously estimated. The revised monthly
data for 2017 is not yet available.

Evgeniya Akhtyrko: Incidentally, the government’s revised 2017 output figure of 0.4% yoy
growth coincided with our previous estimate. January’s output level is a pleasant surprise after the disappointing
results in the previous months. It was particularly strong ahead of the low
comparison base that will start with the February figures (which will be
compared to the effects of last year’s trade blockade). It will be apparent in
a couple of months whether industrial expansion exceeds our current projection
of 4.6% yoy in 2018.