Ukraine industrial output drops 0.5% yoy in August

Ukraine’s industrial output dropped 0.5% yoy in August
(compared to 2.9% yoy growth in July) amid declines in manufacturing and
utilities, the State Statistics Service reported on Sept. 21. Seasonally
adjusted output declined 0.7% m/m in August (vs. a 1.3% m/m decline in July).

In 8M18, industrial output increased 2.2% yoy (vs.
2.6% yoy growth in 7M18).

Mining output rose 2.3% yoy in August (after 4.5% yoy
growth in July). In particular, coal production increased 7.2% yoy while oil
and gas production advanced 7.3% yoy. Meanwhile, iron ore production dropped
0.4% yoy (from a 8.1% yoy surge in July).

August manufacturing output declined 0.5% yoy (from a
2.3% yoy rise in July) mostly owing to a drop in machinery of 1.5% yoy (vs.
1.0% yoy growth in July). The decline in food production slowed to 1.0% yoy
(from  a 1.9% yoy decline in July). The growth in metallurgy slowed to
1.7% yoy (from 5.6% yoy growth in July).

Output in utilities declined 6.4% yoy (from 3.2% yoy
growth in July).

Regionally, growth was strongest in the
Ivano-Frankivsk (14.7% yoy), Sumy (9.7% yoy) and Chernivtsi (7.5% yoy) regions.
Declines were steepest in the Ukraine-controlled Luhansk (-19.0% yoy), Rivne
(-11.1% yoy) and Odesa (-6.9% yoy) regions.

Evgeniya Akhtyrko: Ukraine’s
industry isn’t demonstrating any consistent improvement. The food industry
continues to decline despite growing consumer demand. Ukrainian machinery is
apparently unsuccessful in finding new markets to replace lost clients in
Russia or other CIS countries, while the capacity of the domestic market is
exhausted at the moment.

We are not likely to see any essential boost in
industrial growth through the year end. Our 2018 forecast of 4.6% yoy growth is
subject to downward revision.