The reactor assembly of the third unit at the Mochovce nuclear power plant, pictured in June 2016. (source: SME)
The gradual launch of the third unit belonging to the Mochovce nuclear power plant last year not only pushed its operator Slovenské Elektrárne (SE) into profit, it is also reflected via industrial production statistics.
Slovak industry stagnated year-on-year in May, which is good news, especially when looking at developments in neighbouring countries. However, a look at the detailed data reveals that without the third block in Mochovce and the carmakers, it would have been in a deep year-on-year deficit.
The output of Slovak industry in May shrank by -0.1 percent year on year where it decreased by 1.4 percent, seasonally adjusted, compared to April, based on data of the Statistics Office. The cause of the monthly decline was a technical effect, when the shift in Easter at the turn of March reduced the March industry figures and increased the April ones, noted Ľubomír Koršňák, macroeconomic analyst at UniCredit Bank Czech Republic and Slovakia.
(source: The Statistics Office)
Mochovce’s effect
Industry is still being mainly driven by the energy sector. It has continued to grow in recent months and its output was up 28.7 percent year-on-year in May.
“The reasons for the growth in energy production are perhaps primarily found in the new third unit of the Mochovce nuclear power plant, which gradually reached full capacity production in the past year,” Koršňák wrote in his memo.
Manufacturing output, on the other hand, declined year-on-year, by 1.6 percent in May. On the positive side, manufacturing output also rose slightly on average compared to March and April, mainly due to the growth of the automotive industry, he noted.
SE earned €558 million last year on revenues of €4.8 billion and replaced Slovenská Sporiteľňa in first place, in the ranking of the most profitable companies in Slovakia for 2023. One year ago, the dominant electricity producer in Slovakia, booked a record loss of €217 million. The decisive factor was the full start-up of the third unit. It generates electricity equalling the annual consumption of 0.5 million households.
Growing automotive industry
Although the automotive industry’s output declined in May compared to the Easter-affected April, it was higher than the average in March and April and, apart from the months impacted by the holiday or Easter effect, even recorded an all-time high.
(source: Courtes of the Statistics Office)
Compared to May last year, it grew by 7.9 percent and contributed more than 2 percentage points to the overall year-on-year growth of the industry.
“In other words, without the growth of the automotive industry, industry would have declined by more than 2 percent year-on-year,” said Koršňák. “The temporary problems in car production at the start of the year, which may also have been related to starting the production of new models or repeating bottlenecks caused by problems in the Suez Canal, seem to have been subdued, at least for the time being.”
However, recent months suggest that the demand for new cars in the key European market has stabilised at levels noticeably below pre-pandemic levels and is no longer growing. This may also dampen the potential for the further growth of carmakers in Slovakia, said Koršňák.
