Ukraine’s industrial output jumped 4.8% y/y in December

Ukraine’s industrial output jumped 4.8% y/y in December
Ukraine’s industrial output jumped 4.8% y/y in December
By bne IntelliNews January 26, 2021

Ukraine’s industrial output jumped 4.8% year on year in December after declining 0.3% y/y in November, the State Statistics Service reported on January 22.

Seasonally adjusted output increased 1.1% month on month in December. In 2020, industrial output dropped 5.2% y/y, Concorde Capital said in a note.

“The increased demand and favourable price situation for iron ore and metals at the external markets helped Ukraine’s industry to advance significantly in December. In addition, the low comparative base of the previous year contributed to the impressive result. Meanwhile, Ukraine’s other major industrial sectors are still failing to show a consistent improvement, showing large month-to-month swings,” Evgeniya Akhtyrko of Concorde Capital said in a note.

Manufacturing output climbed 1.8% y/y in December (after a 3.4% y/y decline in November). In particular, the output in metallurgy improved 4.3% y/y (after 8.3% y/y growth in November), chemical production advanced 3.6% y/y (vs. 13.4% y/y decline in November) and pharmaceutical production surged 25.1% y/y (vs. 0.6% y/y decline in November).

At the same time, the output in machinery declined 3.3% y/y (vs. a 15.3% y/y plunge in November), while food production slid 1.7% y/y (5.4% y/y in November), Concorde Capital commented.

The growth in mining accelerated to 5.4% y/y from 1.8% y/y in the previous month, driven by a surge in iron ore production of 20.0% y/y.

At the same time, coal production fell 2.3% y/y and oil & gas production dropped 4.5% y/y. The supply of electricity & natural gas accelerated to 15.8% y/y from 10.0% y/y growth in November.  

Regionally, the steepest growth in December was observed in the Ukraine-controlled Donetsk (23.7% y/y), Odesa (22.2% y/y) and Vinnytsia (18.9% y/y) regions. Seven out of 25 regions posted a decline in industrial output. It dropped the most in Rivne (-28.6% y/y), Mykolayiv (-13.1% y/y) and Ukraine-controlled Luhansk (-12.9% y/y).

“The result of Ukraine’s industrial production in 2021 will largely depend on how long the favourable external conditions for iron ore and metals producers last. Meanwhile, domestically oriented producers are not likely to advance a lot, and any growth they experience will just be a bounce after the recession of 2020. We expect Ukraine’s industrial output will advance 6.5% y/y in 2021,” Akhtyrko added.