Ukraine industry grows 2.4% in 2016

Ukraine’s industrial output sped up 4.5% yoy in December from 3.7% yoy in November, the State Statistics Service reported on Jan. 23. The main driver was utilities growth, which accelerated 10.4% yoy from 3.5% yoy in November.

At the same time, all other core sectors slowed in growth: machinery increased 2.1% yoy (after 6.9% yoy in November), mining added 0.6% yoy (3.3% yoy in Nov.), and metals inched up by 0.5% yoy (4.9% yoy in Nov.).  Chemicals declined 6.1% yoy, almost the same rate as the prior month (-6.4% yoy in November). 

For 2016, industrial production increased 2.4% yoy led by metals (5.9% yoy) and utilities (2.6% yoy). Machinery (1.4% yoy) and chemicals (0.4% yoy) lagged behind.  Mining declined 0.3% yoy.

Alexander Paraschiy: December industry was stronger than we expected, owing to cold weather that boosted utilities. In the meantime, other core economic sectors remain volatile, a tendency that keeps us quite cautious on industry prospects in 2017. Metal prices are expected to roll back through the year. What’s more, the effect of the low comparative base that industry enjoyed in 2016 will also fade away gradually. Against this backdrop, we expect industrial growth slowing to +1.8% yoy in 2017.