Industrial production in Slovakia increased by 7.2 percent year-on-year in January 2019. This figure was mostly affected by growth in manufacturing of 7.9 percent, growth in electricity, gas, steam and air-conditioning supply of 3.5 percent and growth in mining and quarrying of 2.4 percent.
“The most significant increase was in the automotive industry and this was massively supported by the growing production at the new Jaguar Land Rover plant,” Ľubomír Koršňák, analyst for the UniCredit Bank Czech Republic and Slovakia, wrote in a memo.
Transport equipment in the lead
In terms of the specific industrial sectors which contributed the most to the total production increase, the most significant growth was recorded in the manufacture of transport equipment, 38.1 percent y-o-y.
“Without the automotive sector, Slovak industry would not have grown in January,” Krošňák stressed, adding that there would have otherwise been a drop in overall production of 0.4 percent.
Another factor was the 22.7 percent y-o-y growth in the manufacture of machinery and equipment, the 3.5 percent y-o-y growth of electricity, gas, steam and air-conditioning supply, the 6.7 percent y-o-y growth in the manufacture of food, beverages and tobacco products and the 5.5 percent y-o-y growth in the manufacture of electrical equipment.
Conversely, a decrease of 7 percent y-o-y was reported in the manufacture of metal and fabricated metal products, except for machinery and equipment. The manufacture of rubber and plastic goods and other non-metallic mineral products dropped 7.2 percent y-o-y. Other manufacturing and the repair and installation of machinery and equipment fell by 9.9 percent y-o-y. The manufacture of computer, electronic and optical products dropped 9.7 percent y-o-y and the manufacture of chemicals and chemical products fell by 15.3 percent y-o-y.
Automotive production will continue rising
In terms of the main industrial groupings, the production of investment goods rose by 28.7 percent y-o-y, production related to energy rose 2.4 percent y-o-y and the production of non-durable consumer goods increased 2 percent y-o-y. The production of durable consumer goods dropped by 11.5 percent y-o-y and the production of intermediate goods fell by 6.3 percent y-o-y.
After seasonal adjustment, industrial production increased by 1.1 percent in January 2019 compared with December 2018.
Lower external demand will result in the further lowering of production in Slovak industry in the upcoming months, according to Koršňák. Despite the strong numbers for mechanical engineering at the beginning of the year, the majority of fields will not avoid the cyclic slow-down.
“There will be maybe one exception: the automotive industry,” Koršňák added.
The industry will be probably be the only significant source of Slovak industrial growth, thanks to the new production capacities and the gradual onset of production by the fourth carmaker in Slovakia. However, the industry will remain in the black in 2019, as was confirmed in January, the analyst said.
12. Mar 2019 at 0:42 | Compiled by Spectator staff