Ukraine industrial output drops 4% in September

Ukraine’s industrial output dropped 4.4% yoy in
September, slowing down from a 5.3% yoy decline in August, the State Statistics
Service reported on Oct. 22. Seasonally adjusted output slid 1.1% m/m in
September.

In 9M20, industrial output dropped 7.0% yoy.

Manufacturing output fell 5.8% yoy in September (after
a 7.7% yoy decline in August). In particular, the decline in metallurgy slowed
to 7.6% yoy (vs. 10.4% yoy in August), while machinery output dropped 9.1% yoy
(vs. 22.8% yoy in August). Chemical production grew 5.8% yoy (vs. 0.6% yoy
growth in August).

Meanwhile, the decline in food production deepened to
8.7% yoy (vs. a 0.4% decline in August), while production of pharmaceuticals
dropped 4.8% yoy (vs. a 14.1% yoy surge in August).

The decline in mining deepened to 2.8% yoy (vs. a 0.1%
yoy slide in August). In particular, iron ore production dropped 8.4% yoy, coal
production fell 5.6% yoy and oil & gas production slid 0.6% yoy. The supply
of electricity & natural gas slid 0.2% yoy after a 4.6% yoy decline in
August.

Regionally, the steepest declines were observed in the
Ternopil (-29.5% yoy), Kirovohrad (-21.8% yoy) and Dnipropetrovsk (-14.7% yoy)
regions. Industrial output grew the most in the Zakarpattia (10.6% yoy), Rivne
(9.4% yoy) and Lviv (5.6% yoy) regions.

Evgeniya Akhtyrko: The fall in
industrial output slowed down in September mostly because of a slower drop in
metallurgy and machinery. Meanwhile, no sector demonstrated consistent
improvement in recent months. In particular, the slower decline in
manufacturing in September was offset by a deepened mining fall.

We expect industrial output to drop 6.0% yoy in
2020 (vs. a 0.5% yoy decline in 2019).