Industrial output loses momentum, +3.8% yoy in November

Monthly growth in industrial production slowed to 3.8% yoy in November (vs. 4.7% yoy in October), bringing the 11M11 tally to 7.8% yoy, according to Ukrstat yesterday. November was substantially weaker month-on-month for most sectors, with metallurgy and machinery output growth sliding into the red on a year-on-year basis (-1.4% and -0.6%, respectively). Chemicals and utilities were two sectors that stood out though, maintaining strong double-digit growth yoy. November’s monthly output data was in line with the Reuters consensus of +3.8% yoy, but slightly below our expectation of +4.0% yoy. Svetlana Rekrut:A slowdown in industrial production has been inevitable – weakening external demand and a related price correction are taking their toll on local producers. As trading partners’ economies continue to cool, we see little chances for Ukrainian industry to regain momentum in 1H12. While domestic demand might provide some growth support, it will by no means compensate for weakness in exports. We see industrial output at 7.2% yoy in 2011E and decelerating to 4.0% yoy in 2012E.