Ukraine industry falls 4.9% in November

Ukraine industrial output decreased 4.9% yoy in November compared to -5.0% yoy in the prior month, the State Statistics Service reported on Dec. 21. In 11M15, industry contracted 14.4% yoy (up from -15.4% yoy in 10M15).

The imporved statistics was driven by a sudden growth in machinery (+4.0% yoy vs. -9.3% yoy in October) as well as a slight improvement in metals production (-3.4% yoy vs. -4.9% yoy in October). Other core industries significantly worsened as utilities deepened to -8.1% yoy (compared to -4.9% yoy in October), chemical production decreased by -3.1% yoy (0.0% yoy), and mining fell -2.7% yoy (vs. +1.9% yoy). Output in the Donetsk region again switched into red in November (-13.0% yoy) while in the Luhansk region, industrial production kept growing (+61.0% yoy).

Alexander Paraschiy: The November results are in line with our estimates, which means that in 2015 industrial output will have fallen close to our projection of -13.8% yoy. In regards to 2016 prospects, we do not see much optimism. Sliding prices on metals and iron ore, Russian aggression (trade sanctions against Ukraine and the cancelled free trade agreement) and the cooling of the regional economy on the back of the Russian depression all promise quite a complicated development path for Ukraine’s industry. Against this backdrop, we anticipate near zero industrial output growth (+0.7% yoy) in 2016.