Ukraine industrial output falls 1.5% in February

Ukraine industrial output falls 1.5% in February
Ukraine industrial output falls 1.5% in February
By bne IntelliNews March 24, 2020

Ukraine's industrial output fell 1.5% year on year in February after sliding 5.1% y/y in January, the State Statistics Service reported on March. 23. Seasonally adjusted output decreased 0.2% month on month. In 2M20, industrial output dropped 3.1% y/y.

The data was probably out of date even before it was released, as the coronavirus (COVID-19) infections in Ukraine is accelerating and the government is starting to enforce social distancing on the population. However, the data shows the economy was already slowing before the outbreak began.

Manufacturing output slid 0.4% y/y in February (after a 3.2% y/y decline in January). In particular, machinery production fell 13.2% y/y (after a 10.5% y/y decrease in January). Metallurgical output dropped 4.3% y/y (vs. a 10.3% y/y decline in February). Meanwhile, food production increased 6.6% y/y (vs. 2.9% y/y growth in January) and the chemical industry surged 22.5% y/y (after a 24.4% y/y advance in January).

Mining output contracted 4.1% y/y in February, after declining 4.5% y/y January. In particular, coal production plunged 15.3% y/y, oil and natural gas production slid 0.2% y/y and iron ore output dropped 5.6% y/y. The supply of electricity and natural gas slid 1.8% y/y in February after an 11.8% y/y drop in January.

Regionally, the steepest declines were observed in the Ukraine-controlled Luhansk (-46.5% y/y), Zakarpattia (-13.6% y/y) and Dnipropetrovsk (-11.2% y/y) regions. Growth was strongest in the Kherson (20.8% y/y), Lviv (15.0% y/y) and Vinnytsia (13.8% y/y) regions.

“February’s slowdown in industrial decline would be an encouraging development if [it were] not for the severe lockdown measures introduced by the government at the end of the previous week in its attempt to counteract the spread of coronavirus infection throughout Ukraine,” Evgeniya Akhtyrko of Concorde Capital said in a note. “It’s already obvious that every day of the lockdown has an extremely negative effect on economic activity, including the looming threat of a complete shutdown of industrial enterprises.”

We are observing the current developments, both in the global and domestic economies, in order to formulate our vision on Ukraine’s industrial development in 2020.