New plant of Jaguar Land Rover in Nitra (source: SITA)
Industrial production in Slovakia increased by 3.1 percent year-on-year at the end of 2018, Slovakia's Statistics Office (ŠÚ SR) reported.
This was mostly the result of the growth in manufacturing by 4.1 percent and by a decrease in gas, electricity, steam and air-conditioning supply by 1 percent, as well as in mining and quarrying by 3.9 percent.
"The year-on-year industrial growth in December was largely unbalanced and concentrated almost exclusively on the automotive industry," analyst Ľubomír Koršňák of the UniCredit Bank Czech Republic and Slovakia wrote in a memo.
The growth in car sector was positively affected in the last two months of the year, since the Jaguar Land Rover plant in Nitra launched its production, he added.
In addition, the most significant growth was recorded in the manufacture of transport equipment by 26.4 percent and manufacture of basic pharmaceutical products and pharmaceutical preparations by 73.2 percent.
After seasonal adjustment, however, industrial production decreased by 0.9 percent in December 2018 compared with November 2018.
"Problems of the industry in Germany at the end of the year have been fully demonstrated in other major export sectors of the Slovak industry," added Koršňák, naming the metallurgy, engineering and the building industry.
Slow-down expected
As for the future prospects, Koršňák opines that the lower external demand will also slow down the performance of Slovak industry.
"Most sectors will not avoid a cyclical slow-down, with one exception being the automotive industry," Koršňák added.
The sector will be the only more significant source of Slovak industrial growth, particularly due to the production of Jaguar Land Rover. The other three carmakers will not contribute to the increase in industrial production and, similarly to other sectors, will instead slow down, the analyst said.
"Thanks to the supply shock, the Slovak industry as a whole will remain in the black," he concluded.
