Slovak industrial sales moved lower on an annual basis for the third straight month in July 2013, with the decline deepening to 2.7% from a revised 1.6% in June, data from the statistics office showed. The decline came as sales of utilities dropped 12.8% y/y in July following a 13% y/y fall in June, while sales of the manufacturing industry fell 1% y/y following a 0.2% y/y growth in June.

The auto manufacturing sector (which accounts for more than a quarter of total industrial sales) reported a 7.6% y/y drop in July sales, its worst performance so far this year, reversing a 0.2% y/y rise in the previous month. Sales of computers, electronics and optics (another important driver of the country’s export-oriented industrial sector) jumped 12.9% y/y after a 0.7% y/y fall in June.

July’s industrial sector turnover fell 0.6% m/m on a seasonally adjusted basis, following a 0.9% decline in the previous month.

For the first seven months of the year, industrial sales fell 1.1% y/y.

IntelliNews comment: The further worsening of industrial sales in July confirms that the surprising recovery in April was a one-off event that could not be sustained. The manufacturing industry is vital for Slovakia’s economic growth, as its economy is driven mainly by exports of locally produced cars and electronics. But foreign demand is widely expected to remain subdued this year, denting Slovakia’s GDP growth to less than 1% in 2013 from 2% in 2012. Slovakia's annual industrial output growth slowed to 2% in July 2013, remaining well below last year’s double-digit growth levels.

For the full-year 2012, Slovak industrial sales grew 6.2% y/y to EUR 82.25bn, buoyed by a 21.8% growth in the sales of the automotive industry and by an 8.1% rise in the sales of the electronics industry.