Analyst: Car Sector Surging, Overall Industrial Growth Rather Shy

(Stock photo by TASR/AP)

Bratislava, June 11 (TASR) – Despite the Slovak automotive sector’s surging output, the country’s overall industrial growth has been rather shy, UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak stated on Monday in a commentary on Slovakia’s industrial production for April.

Pointing to the annual ‘Easter effect’, meaning a contraction in output in late March or in April, Korsnak said that an illusion of industrial acceleration compared to early 2018 was created by the energy sector, which declined sharply at the beginning of the year, with the slump then significantly decelerating in March and April.

Meanwhile, the processing industry has been pulled down recently by the chemical sector and consumer electronics production, with the latter falling by 14.8 percent year-on-year in April.

Commenting further on developments in this sector, Korsnak pointed to Slovakia-based producers struggling with growing salary costs and strong foreign competition at the same time, while the European market has been rather slumberous, without a strong impulse, as was witnessed in the transition from CRT television sets to LCD.

On the other hand, all key export sectors (except for consumer electronics) continued growing in April, with the car industry as the country’s strongest sector swelling by 10.7 percent y-o-y in April, being responsible for more than half of Slovakia’s exports.

Stating that the automotive industry will most likely “firmly grasp the sceptre for the main draught of Slovakia’s industry”, partly aided by the launching of production at Jaguar Land Rover in Nitra, Korsnak expects the country’s industry to keep its growing trajectory in the next few months.

Nevertheless, it’s to be counted on somewhat for there to be a deceleration in metallurgy as a typical anticipatory sector in the second half of 2018 due to the approaching culmination of the economic cycle.

According to a Statistics Office report earlier in the day, industrial production in Slovakia posted a year-on-year increase of 4.2 percent in April.