Industrial output increases 1.4% in October

Ukraine’s industrial output increased 1.4% yoy in
October after declining 0.7% yoy in September, the State Statistics Service
reported on Nov. 23. Seasonally adjusted output increased 1.9% m/m in October.

In 10M21, industrial output increased 1.4% yoy (vs. a
6.0% yoy decline in 10M20).

Manufacturing output increased 0.4% yoy in October
(after a 1.1% yoy decline in September). In particular, food output increased
2.7% yoy, machinery production grew 2.8%, coke production and oil processing
surged 15.6% yoy. At the same time, chemicals production plummeted 13.6% yoy,
while metals output stayed flat year-on year.

Mining sector production advanced 0.6% yoy in October
(vs. a 1.0% yoy growth September). In particular, oil and gas processing
advanced 0.6% yoy, while coal production dropped 4.6% yoy, iron ore output
declined 3.0%.

The supply of electricity and natural gas jumped 7.6%
yoy (vs. 2.4% yoy growth in September).

Regionally, output increased in 11 out of 25 regions.
It grew the most in Khmelnitsky (25.0% yoy), Ternopil (21.1% yoy) and Vinnytsia
(10.7% yoy) regions. The highest industrial growth in October was in Chernivtsi
(-13.9% yoy), Zakarpattia (-7.6% yoy) and Rivne  (-7.0% yoy).

Evgeniya Akhtyrko: The
improvement in industrial output in October was mostly due to a good growth in
electricity and natural gas. Meanwhile, the performance in manufacturing
remains very sketchy. The growth in food production and machinery is a weak
remedy to counteract the continuing fall in chemicals and stagnation in metals
output.

We don’t see any factors which could help Ukraine’s
industrial production accelerate through the end of the year. We expect
Ukraine’s industrial output to increase 1.1% yoy in 2021 (vs. 4.5% yoy decline
in 2020).