Industrial production decline deepens in August

The decline in Ukraine’s industrial production deepened to 4.7% yoy in August, after 0.9% in July, according to UkrStat yesterday. Growth in 8M12 stood at negative 0.4% vs. +0.2% in 7M12. Metallurgy and machinery were the key drags on overall industry performance – falling 12.5% yoy and 13.7% yoy, respectively, last month (-3.8% and -2.5% in 8M12). Food processing decreased 0.9% yoy in August (+1.0% in 8M12).

Alexander Paraschiy: Steel and machinery sectors are not showing any meaningful signs of revival while food processing is starting to feel the drop in grain and oilseed harvest this year. We thus expect industrial growth will remain in negative territory at least in September and October. We maintain our 2012 industrial growth projection of 0.2% yoy, but that relies on our expectation of a moderate sector recovery toward the end of the year.