Ukraine’s industrial output soared in April by 13.0% y/y as the pandemic low base effects kicked in

Ukraine’s industrial output soared in April by 13.0% y/y as the pandemic low base effects kicked in
Ukraine's industrial production exploded, rising 13% in April, mainly on low base effects, whereas the seasonally adjusted growth was a more modest 2.7% expansion y/y / bne IntelliNews
By bne IntelliNews May 25, 2021

Ukraine’s industrial output exploded in April, increasing by 13.0% year on year from a 2.1% y/y growth in March largely thanks to the low base effect from the pandemic, the State Statistics Service reported on May 24.  

Seasonally adjusted output advanced a much more modest 2.7% month on month in April, and in the first four months of this year industrial output inched up 1.5% y/y (vs. 7.0% y/y decline in 4M20).

“The high y/y industrial growth in April was expected given the bottomed-out comparative base of April 2020 (-15.1% y/y),” Evgeniya Akhtyrko of Concorde Capital said in a note.   

All of this year’s indicators are going to be distorted by the low base effects, as the pandemic was in full swing by April last year. 

Manufacturing output surged 18.0% y/y in April (after a 2.5% y/y increase in March). The accelerated growth was mostly driven by metallurgy and machinery, which advanced 29.1% y/y and 41.0% y/y respectively. In addition, textile production surged 58.2% and wood processing added 32.7% y/y. Chemicals production increased 8.6% y/y. Meanwhile, food production dropped 3.4% y/y and pharmaceuticals dropped 10.0% y/y, Concorde Capital reported.  

Mining output increased 6.9% y/y (vs. a 1.5% y/y decline in March). In particular, coal production surged 44.9% y/y and iron ore production advanced 11.8% y/y. Meanwhile, oil and gas production declined 3.8% y/y.

The supply of electricity & natural gas grew by 4.5% y/y, slowing from 7.3% y/y growth in March.

Regionally, the highest industrial growth in April was observed in Chernivtsi (two-fold y/y increase), Ternopil (46.0% y/y) and Zakarpattia (42.0% y/y). Six out of 25 regions posted a decline in industrial output. It dropped the most in the Ukraine-controlled Luhansk (-28.0% y/y), Kherson (-10.6% y/y) and Kirovohrad (-10.4% y/y) regions.

“Meanwhile, the decline in domestic food production continues, which is likely to be caused by not only agricultural supply drops amid lowered agricultural production in 2020 but also by the disruption of economic ties and the failure of auxiliary businesses during the Covid crisis,” Akhtyrko added. “Ukraine’s industry will post an impressive growth in May, which will be mostly the result of the low comparative base. We expect industrial output to increase around 4% y/y in 2021 (vs. a 4.5% y/y decline in 2020).”

Data

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