Ukraine Industry


Improvement in industrial production data continues

In October, industrial production fell 5.0% over the same month last year, according to data released by the State Statistics Service of Ukraine. The result was an improvement from September’s 5.1% decrease and marked the most moderate contraction in 16 months. However, October’s result still marked the 22nd consecutive month of decline amid the geopolitical tensions in the country. Significant contractions—albeit moderate in the context of recent data—were recorded in manufacturing and in electricity, steam, gas and air conditioning. However, mining and quarrying expanded over the same month last year.

The ongoing crisis between the Ukrainian government and pro-Russian separatist groups has had a large negative impact on industry, which is already weak. The conflict has been centered in the eastern regions of Luhansk and Donetsk, Ukraine’s industrial heartland, which had been plagued with steep contractions for over one year. However, in October, both regions expanded for the second month in a row.

On a monthly basis, industrial production rose a seasonally-adjusted 7.3% in October, which was above September’s 5.9% increase. The annual average variation in industrial output in October improved for a third consecutive month, confirming the end of the uninterrupted downward trend that had been in place since May 2014, rising from minus 16.5% to minus 15.6%.

FocusEconomics Consensus Forecast participants’ project that industrial output will plummet 14.4% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect industrial production to rise 2.8%, which is down also unchanged from last month’s forecast.

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Ukraine Industry Chart

Ukraine Industry October 2015

Note: Year-on-year and annual average variation of industrial production in %.
Source: State Statistics Service of Ukraine and FocusEconomics calculations.

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