Ukraine industrial output falls 7.5% yoy in November

Ukraine’s industrial output fell 7.5% yoy in November
after sliding 5.0% yoy in October, the State Statistics Service reported on
Dec. 23. Seasonally adjusted output declined 1.9% m/m. In 11M19, industrial
output decreased 1.2% yoy.

Manufacturing output shrank 6.4% yoy in November
(after a 6.0% yoy decline in October). In particular, machinery production
plummeted 12.7% yoy (from a 5.8% yoy decline in October). Metallurgy output
dropped 14.2% yoy (vs. a 19.9% yoy plunge in October). In addition, food
production fell 4.7% yoy (vs. a 4.3% yoy decline in October).

Mining output fell 7.9% yoy in November, deepening
from a 3.6% yoy decline in October. In particular, coal production dropped
10.4% yoy, oil and natural gas production slid 0.9% yoy, and iron ore output
fell 8.9% yoy. Output in supply of electricity and natural gas slid 12.0% yoy
in November, deepening from a 4.4% yoy drop in October.

Regionally, the steepest declines were observed in the
Zakarpattia (-30.5% yoy), Chernihiv (-22.0% yoy) and Ukraine-controlled Donetsk
(-16.6% yoy) regions. Growth was strongest in the Odesa (19.5% yoy), Kirovohrad
(8.8% yoy) and Kherson (4.4% yoy) regions.

Evgeniya Akhtyrko: The
situation in Ukraine’s industry is going from bad to worse. The deteriorated
price situation on global markets has damaged Ukraine’s metallurgy and mining.
In addition, Ukraine’s abnormally warm weather in November contributed to
declines in demand for electricity and natural gas.

Surprisingly, the food industry is unable to
demonstrate a positive trend, despite fast-growing consumer demand and
plentiful raw commodity supply, ensured by a record-high harvest for two years
in a row.

We are downgrading our forecast on industrial
output, expecting a 1.8% yoy contraction in 2019. Recall, Ukraine’s industry
increased 1.6% yoy in 2018.