16 November 2011
Ukraine’s monthly industrial output slowed to 4.7% y-o-y in October from 6.4% y-o-y in September, according to UkrStat. In 10M11, growth remained strong at 8.2%. Machinery remained the biggest driver with growth at 13.1% y-o-y on strong demand for Euro 2012 infrastructure and CIS railcar orders. Growth in metallurgy, the largest industrial sector, continued to decelerate to 5% y-o-y in October from 19% y-o-y in August. Svetlana Rekrut: We believe the main reason behind the slowdown in the industrial sector is deterioration in external demand. Domestically-oriented sectors are holding up better, but facing risks due to weaker real income growth. We expect industrial output to keep decelerating in the next couple of months given tough external market conditions and a high base effect. We forecast industrial production to increase 7.5-8.0% y-o-y for 2011 and somewhat weaker at 6.5%-7.0% y-o-y in 2012.