Ukraine industrial output increases 2% in March

Ukraine’s industrial output increased 2.1% yoy in
March after a 4.6% yoy decline in February, the State Statistics Service reported
on April 22. The seasonally adjusted output advanced 1.8% m/m in March. In
1Q21, industrial output declined 2.0% yoy.

Manufacturing output increased 2.5% yoy in March
(after a 6.7% yoy decline in February). In particular, output in metallurgy picked
up 5.2% yoy (after a 3.5% yoy decline in February), the output in machinery
advanced 7.6% yoy (after dropping 7.0% yoy in February). The growth of
chemicals production accelerated to 14.3% yoy (from 13.5% yoy in February).
Meanwhile, food output declined 6.2% yoy (vs. a 13.1% yoy decline in February),
pharmaceuticals production plummeted 18.2% yoy (vs. a 0.4% yoy increase in
February).

Mining production declined 1.5% yoy (from a 3.9% yoy
decline in February). In particular, oil and gas production dropped 4.4% yoy.
At the same time, iron ore production advanced 3.2% yoy, coal production jumped
8.1% yoy.

The supply of electricity & natural gas increased
7.3% yoy, accelerating from 1.9% yoy growth in February.

Regionally, the highest industrial growth in March was
observed in Volyn (18.2% yoy), Zhytomyr (15.6% yoy) and Ivano-Frankivsk (15.4%
yoy). Ten out of 25 regions posted a decline of industrial output. It dropped
the most in Kirovohrad (-19.6% yoy), Kherson (-7.5% yoy) and Mykolayiv regions
(-6.4% yoy).

Evgeniya Akhtyrko: The
significant improvement in the metallurgical and machinery sectors halted a
downward trend in Ukraine’s manufacturing. The lower comparative base of March
2020 also helped to show a more decent statistical result.

Meanwhile, the decline in domestic food production is
still significant which is likely to be the aftermath of agricultural supply
drops because of lowered agricultural production in 2020.

Ukraine’s industry will post significant growth in
2Q21, which will be mostly the result of a low comparative base of 2Q20, as it
was hit the most by nation-wide lockdown. We expect that the industrial growth
in 2021 will not be much more than just a bounce after the downfall of the
prior year. The output will increase around 4% yoy (vs. a 4.5% yoy decline in
2020).