Slovak industry slowed down mostly by energy

Production supported by the automotive sector.

Illustrative stock photoIllustrative stock photo (Source: Sme)

The industrial production increased by 5.9 percent year-on-year in May. Its development was affected by an increase in manufacturing by 8.1 percent and by a decrease in electricity, gas, steam and air-conditioning supply by 12.5 percent; and in mining and quarrying by 3.5 percent, the Statistics Office informed.

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“The increase in industry was negatively impacted mostly by the production and the supply of energy which recorded a relatively strong drop in both monthly and annual terms,” said Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, as quoted by the TASR newswire.

The fall in the energy sector thus influenced the annual increase in industrial output by more than 1 percentage point. On the other hand, the manufacturing industry continued growing also in May. It increased by 0.6 percent compared to April, while the annual dynamics slowed down from 9 to 8.1 percent, Koršňák added.

The manufacturing industry has been supported mostly by the automotive industry whose production in May achieved a new historical high as it rose by 18.7 percent y/y. Moreover, manufacturing of basic metal and fabricated metal products except machinery and equipment rose by 9.9 percent, manufacturing of electrical equipment by 23.1 percent, manufacturing of computer, electronic and optical products by 29.2 percent, and in manufacturing of machinery and equipment n.e.c. by 12.4 percent, according to the Statistics Office.

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The total production was affected by a decrease in manufacturing of rubber and plastic products and other non-metallic mineral products by 22.9 percent, electricity, gas, steam and air-conditioning supply by 12.5 percent, manufacturing of coke and refined petroleum products by 5.2 percent, mining and quarrying by 3.5 percent; and in manufacturing of basic pharmaceutical products and pharmaceutical preparations by 7.6 percent.

As for the further development, the increase in industrial production will be impacted mostly by relatively stable restoration of European economies supported by cheap oil and slackened currency policy, Koršňák opined.

“In the end of the year the industry will be influenced by two contradictory factors,” Koršňák added, as quoted by TASR. “The slow-down of the industrial growth might be accentuated by the uncertainty resulting from the British referendum, while the statistical effect will highlight the annual growth.”

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