Slovak industrial production up by 1.2% y/y in October

Slovak industrial production up by 1.2% y/y in October
Slovakia industrial output expanded by 1.2% in October y/y driven by growth in manufacturing
By bne IntelliNews December 12, 2018

Slovakia´s industrial output increased by 1.2% in October year-on-year, the Slovak Statistics Office reported on December 11.

The growth was due to a growth in manufacturing (by 3.6%), a drop in energy supplies (by 12.6%) and mining and quarrying by (17.2%) y/y. Seasonally adjusted industrial output in October swelled by 0.9% month-on-month.

Slovakia´s industry slightly recovered in October, in spite of stagnation in automotive industry and a drop in energy sector, said UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak in his commentary on industrial production, online reported.

Production of investment goods rose by 8.2%, production of non-durable consumer goods by 5.8% and production of durable consumer goods by 3.1% y/y. Production related to energy dropped by 12.8% and production of intermediate goods by 0.7% y/y.

Exporting industries kept up a relatively strong y/y growth rate in October, although some of them showed signs of slowdown compared to 3Q18. Mechanical engineers remained the growth drivers with production increasing by 16.2% y/y.

Meanwhile, in 10M18 industrial production increased mostly as a result of increases in industrial manufacturing by 3.1%, decrease in mining and quarrying by 9.7%, and in supplies of electricity, gas, steam and air-conditioning by 6.9%.

In terms of the main industrial groupings, production of investment goods increased by 7%, production of non-durable consumer goods by 5.3% and production of intermediate goods by 0.8%. Production of durable consumer goods decreased by 9.1% and production related to energy by 7.1%, the report showed.

According to Korsnak, European sentiment indicators continued to deteriorate in autumn, but they still indicate a growth in external demand, although slower than in 2017. “This may be reflected in the performance of Slovak industry in the coming months. Moreover, it seems that the tense labour market situation [a lack of labour], which translates into dynamic salary growth, may already be eroding the competitiveness of certain sectors with lower-added value that are more sensitive to labour costs,” he added, the Slovak News Agency reported.

“The fundamentals of industry remain positive in general, so we expect the growth rate of industrial production to accelerate somewhat, and the contribution of a new car plant will be visible next year,” said Slovenska sporitelna analyst Katarina Muchova.