Industrial production increased in August by 17.5 percent year-on-year, which has been the highest rise since at least 2008. The monthly growth in industrial production was also high, amounting to 28.1 percent, after seasonal adjustment.
This was mostly the result of repeated halting of production during planned holidays in several big companies in July, observers agree.
“The holidays thus significantly impacted the industrial numbers this year,” Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, wrote in a memo.
Industrial growth in August was affected especially by a growth recorded in manufacturing (by 18.9 percent y/y); electricity, gas, steam and air-conditioning supply (by 7.3 percent y/y); and in mining and quarrying (by 6.7 percent y/y), the Statistics Office informed.
The strongest growth was reported mostly in the manufacture of vehicles, which increased by 44.5 percent y/y, Katarína Muchová, analyst with Slovenská Sporiteľňa, wrote in a memo. This was, however, caused by the fact that last year the corporate holidays took place in August rather than July, she added.
Koršňák, however, says that the August numbers could not fully compensate the July drop in car production. Its growth dynamic slowed down to 4.9 percent y/y in the summer, which is the slowest annual growth in the past year.
“The slow-down in growth of Slovak car makers in the past two months could also be caused by the slower increase in new sales in Europe, which in many countries has grown close to their long-term potential and thus exhausted the potential of post-crisis gain,” Koršňák said, adding that technical halts in production were also caused by preparations for new production lines.
The holiday volatility also impacted other industrial sectors, he added.
The sentiment in Slovak industry, however, still remains positive, Koršňák said.
It is expected that industrial production will continue increasing in the following months and may amount to 4-4.5 percent this year.
There are, however, certain risks from the point of main business partners, especially in the eurozone, or because of the uncertainty caused by Brexit, Muchová said.
11. Oct 2016 at 13:36 | Compiled by Spectator staff