Ukraine industrial output drops 5% in October

The decline of Ukraine’s industrial output intensified
to 5.0% yoy in October from 4.4% yoy in September, the State Statistics Service
reported on Nov. 23. Seasonally adjusted output slid 0.5% m/m in October. In
10M20, industrial output dropped 6.8% yoy.

Manufacturing output fell 6.6% yoy in October (after a
5.8% yoy decline in September). In particular, the decline in machinery
plummeted to 18.6% yoy (vs. 9.1% yoy in September), food production dropped
7.2% yoy (vs. 8.7% yoy in September). At the same time, the decline in
metallurgy slowed to 3.3% yoy (vs. 7.6% yoy), chemical production grew 1.9% yoy
(vs. 5.8% yoy growth in September).

Mining output declined 2.5% yoy (vs. a 2.8% yoy slide
in September). In particular, iron ore production decreased 1.5% yoy, coal
production fell 11.8% yoy and oil & gas production dropped 2.0% yoy. The
supply of electricity & natural gas slid 1.8% yoy after a 0.2% yoy decline
in September.

Regionally, the steepest declines were observed in the
Ternopil (-20.2% yoy), Chernivtsi (-17.7% yoy) and Sumy (-13.3% yoy) regions.
Industrial output grew the most in the Ukraine-controlled Luhansk (20.3% yoy),
Mykolayiv and Kherson (both 12.1% yoy) regions.

Evgeniya Akhtyrko: The decline
in Ukraine’s industry didn’t slow in October mostly due to very weak results in
the machinery sector, in which the output swings a lot from month to month.
Meanwhile, the slower decline in metallurgy and continued upswing in chemical
production are positive developments.

We are likely to see more moderate declines in
Ukrainian industry in November-December, given the low comparative base of the
previous year. We expect industrial output to drop around 6% yoy in 2020 (vs. a
0.5% yoy decline in 2019).