Ukraine industry drop slows to 13% in July

Ukraine’s industrial output dropped 13.4% yoy in July compared to a 18.1% yoy plunge in June, UkrStat reported on Aug. 18. In 7M15, industrial output decline slowed to 19.5% yoy, from a 21.5% drop in 6M15.

All key industrial sectors improved significantly in July except for machinery. In particular, mining declined 16.2% yoy in July (compared to 20.1% yoy in June), chemical production fell 16.5% yoy (-19.4% yoy), metal production declined 23.3% yoy (-27.1% yoy), and utilities shrunk 13.9% yoy (-15.5% yoy). Slump in machinery sector deepened to 21.0% yoy in July compared to 16.7% yoy in the prior month.

The industrial output slump in the partially occupied regions of Ukraine also improved significantly. In particular, the industry of Luhansk region fell 59% yoy in July, compared to a drop of 78% yoy and 86% yoy in June and May. Output decline in Donetsk region slowed down to 36% yoy in July, compared to 46-47% yoy decline in the prior two months.

Alexander Paraschiy: The July’s statistics looks encouraging – the recovery in industrial output looks again better than we initially expected. For the reason, we upgrade our forecast for 2015 industrial production decline to 13.8%, from 14.6% yoy. The recent trend supports our vision that industry will show a single digit decline rates in the coming months, simply on a low comparative base. Recall, the industry started demonstrating solid decline in output starting August 2014 (when 21.4% yoy drop was recorded), due to escalation of warfare in Donbas.