Industrial growth drifts marginally above zero

Industrial production increased 1.0% yoy (+1.9% mom) in May, taking 5M12 growth to 0.7% yoy, UkrStat reported yesterday. Growth was uneven across segments, with chemicals posting a hefty increase of 14.9% yoy in May (+10.8% yoy in 5M12), while metallurgy remained in the red at -1.1% yoy (-1.6% yoy in 5M12). Other sectors saw slight improvements in May, with construction output turning positive to 0.3% yoy in 5M12 (vs. -3.0% in 4M12) while growth in retail trade turnover accelerated to 14.1% yoy (from 13.2% in 4M12).

Vitaliy Vavryshchuk: Ukrainian industry continues to drift marginally above zero and we think this trend will persist in the next couple of months. Overall, we estimate data for individual sectors remains consistent with GDP growth of ~1.5-2.0% yoy. We maintain our 2012 industrial production growth projection of 2.9% yoy (mainly on expectations of better global commodity markets in 2H12) and GDP growth forecast of 1.9% yoy.