Ukrainian industry plunges 22% in April

Ukraine’s industrial output plunged 21.7% yoy in April, almost flat compared to the 21.1% yoy decline in the prior month, Ukrstat reported on May 18. Metallurgy and mining industries improved to -25.7% yoy (vs. -31% yoy in March) and -25.4% yoy (vs. -28.5% yoy), respectively. Yet other key production sectors worsened: machinery fell 25.8% yoy (-22.7% yoy in March), chemicals shrunk -23.5% yoy (-22.5% yoy), and utilities declined 15.1% yoy (-12.0% yoy). Industrial output in the war-torn eastern regions was almost unchanged vs. March, plunging 89.0% yoy in Luhansk and 49.5% yoy in Donetsk.

Alexander Paraschiy: The April industry decline is totally in line with our estimates. Yet we reiterate our view that the industrial decline is bottoming out and further deepening is unlikely unless the war escalates in the east. Prospects for the second half still remain a big question since recovery will not happen quickly against the backdrop of a cooling regional economy, partly due to Russian economic problems as well. However, we maintain our estimate of a 5.0% industry decline in 2H15, which means industry will have fallen 14.6% yoy in 2015.