Ukraine industrial output rises 1.4% yoy in October

Ukraine’s industrial output rose 1.4% yoy in October
after a 1.3% drop in September amid restored growth in manufacturing and
accelerated mining, the State Statistics Service reported on Nov. 22.
Seasonally adjusted output increased 0.6% m/m.

In 10M18, industrial output increased 1.8% yoy
(unchanged from 9M18).

Mining output rose 5.2% yoy in October (after a 0.7%
yoy increase in September). In particular, coal production surged 14.2% yoy
while oil and gas production advanced 7.5% yoy. In addition, growth in iron ore
production was restored, adding 2.5% yoy.

October manufacturing output rose 1.0% yoy (after a
1.6% yoy decrease in September), mostly owing to the growth in pharmaceuticals
(12.1% yoy) and coke and oil production (5.4%)  Meanwhile, the decline in
machinery (-0.3% yoy) and metallurgy (-1.2%) continued.

Output in utilities declined 3.6% yoy (after a 3.9%
yoy drop in September).

Regionally, growth was strongest in the
Ukraine-controlled Luhansk (16.0% yoy), Sumy (15.2% yoy) and Mykolayiv (10.8%
yoy) regions. Declines were steepest in the Zaporizhia (-3.1% yoy), Zhytomyr
(-2.0% yoy) and Dnipropetrovsk regions (-1.8% yoy).

Evgeniya Akhtyrko: It is very
hard to attain overall industrial growth with declines in metallurgy and
machinery – Ukraine’s largest manufacturing sectors. The drop in metallurgy is
mostly due to the deteriorated situation on the world markets and planned repairs at major steel producers.
Machinery is suffering from its inability to replace its lost export markets in
Russia and other CIS countries.

Our 2018 forecast of 4.6% yoy industrial growth is
subject to downward revision.