Ukraine industry plummets 20.7% in May

Ukraine’s industrial output contracted 20.7% in May, a rate that is almost unchanged from a 21.7% yoy drop in the prior month, Ukrstat reported on June 18. Chemical production worsened to a -29.0% yoy drop in May compared to -23.5% yoy in the prior month, while mining improved to a -20.6% yoy drop compared to -25.4% yoy in the prior month.  Other sectors changed only slightly compared to the previous month as metals output fell 24.6% yoy (-25.7% yoy in April), machinery declined 26.7% yoy (-25.8% yoy), and utilities shrank 16.9% yoy (-15.1% yoy).  Monthly industrial output in Luhansk and Donetsk improved slightly in May to -86.0% yoy (-89.0% yoy in April) and -45.9% yoy (-49.5% yoy), respectively.

Alexander Paraschiy: The tendency is in line with our projections and once more confirms that industrial output decline is bottoming out. We expect monthly contraction of about 20 percent to sustain itself till July, with industrial production rates improving afterwards at least due to a lower statistical base (the major devastation of Donbas started in August) to declines of no more than 5%. Given the tendency of the cooling regional CIS economy, we do not expect fast improvement in 2H15. We are keeping our industrial production forecast unchanged at -14.6% yoy for 2015.