Ukraine industry decline slows to 5.8% in August

Ukraine’s industrial output decline slowed down to -5.8% yoy in August from -13.4% yoy in the prior month, Ukrstat reported on Sept. 18. All sectors improved on the back of a low comparative base in August: mining grew 0.9% yoy (-16.2% yoy in July), metals slightly declined by -1.8% yoy (-23.3% yoy), machinery fell 6.3% yoy (-11.0% yoy), utilities decreased 7.5% yoy (-13.9% yoy) and chemical production contracted 13.9% yoy (-16.5% yoy). August output in the Donetsk region improved to -4.0% yoy (-36.0% in July) while turning positive in the Luhank region to 41.0% (compared to -59.0% yoy).

Alexander Paraschiy:  The August industrial output result reflects the effect of the low comparative base that we expected. Recall in August 2014, Russian soldiers invaded eastern Donbas in what resulted in a dramatic industrial output plunge by 21.4% yoy (vs. -12.1% yoy in July 2014). Economists presumed that starting August this year, significant improvement in industrial output statistics was inevitable. Since this current trend is in line with our initial projections, we are keeping our industry production forecast unchanged at -14.6% yoy for 2015.