Slovak industrial production surged in March, adding 13.9% y/y to output after working day adjustments, the statistics office reported on May 12. Raw data, which makes no changes to account for the two extra days in March this year, show activity gained 14.9%.
The boom will be welcomed in Bratislava. Industrial production growth of 7.6% in January had signalled a welcome acceleration in activity as the year kicked off, following an erratic second half to 2016. However, February saw momentum fizzle out, as growth fell to just 2.6%.
Slovakia will now hope that local output can this time rely on the strong activity and confidence in the Eurozone to keep growth on track. The February result was a surprise given the strong data out of the single currency zone, which provides by far the largest chunk of demand for Slovak manufacturing. On top of that, there is hope that a rise in investment, and continued strength in household consumption, will see domestic demand perk up this year.
The March data is in line with figures elsewhere in the Visegrad region. Indicators have hinted at a much stronger start to 2017, but the likes of Poland and Czech Republic have also had to wait until March to see a significant uplift from the strength across the EU. Now it has arrived, Slovakia – which is the most dependent on exports among the Visegrad group of countries – appears to be benefitting the most.
In seasonally adjusted terms, output swelled an impressive 3.9% m/m in March. The challenge now for Slovakia is to repeat the trick to escape an erratic series of output data over the last 12 months or so.
All sectors of industry expanded output in March in annual terms, with manufacturing posting an impressive 14.1% gain. The sector managed expansion of just 2.2% y/y in February, a full 4.1pp slower than in the previous month.
Within that sector, the vital carmaking segment added 12.8%, while computer and electronics manufacturing – the second largest segment – swelled production by 29.7%, albeit following poor recent performance. Output in both the food and coke and fuels segments gained over 30%.
The March boom leaves industrial output 7.9% higher in annual terms across the first quarter of the year.