Industrial production up from low base

INDUSTRY in Slovakia grew at the highest pace in more than two years in January 2010.

INDUSTRY in Slovakia grew at the highest pace in more than two years in January 2010.

According to figures released by the Slovak Statistics Office, industrial output rose 19.3 percent in that month in comparison to January 2009, the sharpest growth since November 2007, the SITA newswire reported.

Industrial manufacturing jumped by 23.7 percent year-on-year; mining and extraction of mineral raw materials increased by 7.1 percent; and generation and distribution of electricity and gas had a modest increase of 3.2 percent.

But analysts say that a portion of these percentage increases can be attributed to a weak comparative base from January 2009 when Slovak industrial production had a sharp dive of over 28 percent as a result of the economic crisis as well as the halt in natural gas from Russia.

According to Eduard Hagara, an analyst at ING Bank, industrial production is reporting
nice-looking growth in annual terms because of the low comparative base but that the trend is not really so positive over the past few months.

He said the base, adjusted for seasonal influences, reflects that recovery in industry slowed down considerably after a quick jump in output in the third quarter of 2009 and that industrial output more or less stagnated in the period from October 2009 to late January 2010.

The analyst predicts that the lower comparative base will boost the reported figures throughout the first half of this year.

“However, we assume that industry will grow only moderately on a monthly basis in line with the economic development of our largest trading partners,” he said.

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