Ukraine Industry August 2016


Industrial output rebounds notably in August

Industrial production returned to growth in August, after contracting in July. According to data released by the State Statistics Service of Ukraine, industrial production rose 3.4% annually, which contrasted the 0.2% contraction recorded in July. The rebound was driven by broad-based growth across the main categories of the index. The trend continued to improve in August and the annual average variation in industrial output rose from July’s minus 0.7% to minus 0.1%.

Looking at the regions, the recovery in the eastern areas of Luhansk and Donetsk, Ukraine’s industrial heartland, continued and output grew at a double-digit pace in both regions. The conflict between the Ukrainian government and pro-Russian separatist groups caused industrial production to plummet by over 10% in 2015.

Sequential data suggested a gloomier picture for industrial production. In August, output fell a seasonally-adjusted 0.8%, which contrasted a 7.0% expansion in July.

Following a substantial contraction in 2015, analysts expect Ukraine’s industrial production to recover part of the lost ground this year. FocusEconomics Consensus Forecast participants project that industrial output will grow 2.2% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists expect industrial production to rise 3.3%.

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Ukraine Industry Chart

Ukraine Industry August 2016

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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