Decline in industrial production in Ukraine accelerates to 6.8% y/y in March.

By bne IntelliNews April 17, 2014

In March, the decline in industrial production accelerated to 6.8% y/y compared to 3.7% y/y contraction seen in February and 5% y/y decrease registered in January, the State Statistics Service has announced. In m/m terms, industrial production rose by 7.4%. In Q1, industrial production fell by 5% y/y versus 4.5% y/y decrease in Q1/13.

Mining and quarrying industry declined by 3.5% y/y and rose by 10.3% m/m in March. The volume of the processing industry in March contracted by 8.1% y/y and increased by 9.4% m/m.

Manufacture of food products, beverages and tobacco in March dropped by 2.6% y/y and increased by 11.2% m/m. Light industry decreased by 4.1% y/y and went up by 1.7% m/m. Production of coke and refined petroleum products declined by 6.6% y/y and grew by 4.2% m/m. Manufacture of chemicals and chemical products contracted by 2.8% y/y and rose by 16.1% m/m.

Manufacture of rubber and plastic products decreased by 3.9% y/y and went up by 21% m/m. Volumes of steel production in March fell by 11.1% y/y and increased by 11% m/m. Output of machinery went down by 17.4% y/y and grew by 3.6% m/m. The decline in industrial production in Ukraine in 2013 accelerated to 4.7% against a 0.5% decline in 2012.

The EconMin forecasts that manufacturing output will grow between 1.4% and 2.6% in 2014. Vitalii Kravchenko, director of the Ministry's industrial policy department, believes that manufacturing output will be growing under the influence of gradual increase in external demand, allowing for revitalization of production in the key trade partner-countries, and also growth internal consumer demand thanks to rise of the population's income. Prediction estimate is that industrial production will improve in 2014 between 1.4% and 2.6% on average, he stressed.

Moreover, the EconMin predicts metal products exports will be growing in 2014. According to evaluation of foreign markets of rolled metal products by the Ukrainian Industrial External Expertize (UEX), moderate improvement of the economic climate in the developed countries (USA and EU) will take place in 2014, a result of which consumption of steel will advance 3.1% (50 million tons) in 2014 over 2013, he stressed.

This year Ukraine can count on higher metal products exports owing to restoration of demand at the Near East and European Union markets, and on stronger supplies to the domestic markets thanks to more intense road construction, and modernisation of heating networks.

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