Ukraine industrial output declines 0.2% yoy in July

Ukraine’s industrial output declined 0.23% yoy in July,
after dropping 2.3% yoy in June, the State Statistics Service reported on Aug.
23. Seasonally adjusted output declined 0.6% m/m. In 7M19, industrial output
climbed 0.4% yoy.

Manufacturing output inched up 0.3% yoy in July (after
a 6.1% yoy plunge in June). In particular, food production advanced 4.4% yoy
(vs. a 0.3% yoy decline in June). Meanwhile, declines in metallurgy and
machinery continued. Metallurgy output fell 3.2% yoy (vs. 6.0% yoy in June),
while machinery output slid 0.1% yoy (vs. a 13.3% yoy plunge in June).

Mining output inched up 0.1% yoy in July,
significantly slowing from 4.3% yoy in the previous month. In particular, iron
ore production declined 1.2% yoy, while oil and natural gas production slid
0.3% yoy. Coal output advanced 6.8% yoy. Production of electricity and natural
gas dropped 3.6% yoy in July (vs. 4.4% yoy growth in June).

Regionally, the steepest decline was observed in the
Zakarpattia (-19.1% yoy), Khmelnitskiy (-18.4% yoy), and Chernihiv (-15.7% yoy)
regions. Growth was strongest in the Vinnytsia (21.9% yoy), Kirovohrad (18.0%
yoy), and Rivne (17.4% yoy) regions.

Evgeniya Akhtyrko: The
improvement in food production wasn’t enough to compensate the continuing decline
in metallurgy and machinery. In addition, the drop in iron ore and oil and
natural gas production offset mining sector results.

We don’t see much chances for robust growth in
industrial output through the year end. Industrial output growth in 2019 is not
likely to exceed 1% yoy (vs. 1.6% yoy in 2018) unless we observe a significant
improvement on external markets for Ukrainian steel makers.