Analyst: Industrial Growth Decelerated in June, VW Strike Not Only Culprit

(Stock photo by TASR)

Bratislava, August 11 (TASR) – Slovakia’s industrial growth decelerated in June in line with expectations, and the strike for higher salaries at Volkswagen’s plant in Bratislava was only one of several reasons for this, said UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak in a commentary on Friday.

Industrial production recorded year-on-year growth of 1.8 percent in June 2017, and after seasonal adjustments, industrial production shrank by 1.1 percent month-on-month.
Nonetheless, Korsnak noted that the week-long strike at VW had a lower effect on overall figures than expected, as the automotive sector even recorded a slight boost on a monthly basis. This might have been due to a stronger performance at VW before and after the strike, or for other carmakers in the same month, noted Korsnak.

“Several sectors that had been doing well in previous months saw seasonally adjusted m-o-m drops in June,” said Korsnak, adding that this concerned chiefly engineering, the production of electronic devices and the food industry.

Meanwhile, production of metals and metallic constructions has been a workhorse of Slovakia’s industrial growth in recent months, maintaining its double-digit figures (up by 12.1 percent m-o-m in June) and contributing as many as 1.65 percentage points to the country’s overall industrial growth. As for minor sectors, furniture production and the pharmaceutical sector did especially well in June, said the analyst.

Pointing to the stable consumer mood in Europe, Korsnak said that Slovakia’s industrial growth should stand at 4-5 percent year-on-year in almost each remaining month of 2017, while it seems that summer holiday production breaks were concentrated in July at most companies.