Analysts: Slovakia’s Industrial Growth Decelerated in June

(Stock photo by TASR)

Bratislava, August 10 (TASR) – Month on month, Slovakia’s industrial growth decelerated in June, UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak stated on Wednesday.

“In contrast to May, when industry was pushed down mainly by lower energy output, it was the key processing industries that posted a drop in June. At the same time our earlier estimates were confirmed, with the energy slump emerging only as a short-term issue. The sector managed to return to its usual levels in June, posting a negligible year-on-year decline of 0.1 percent,” said Korsnak.

“Slovak industry’s growth should continue to be driven mainly by a relatively stable revival of European economies, supported by cheap oil and loose monetary policies. The mood in Slovak industry remains predominantly positive, and largely unaffected by the result of the Brexit referendum – like other continental European economies. The summer months – involving regular holiday shut-downs – brought certain volatility into statistics, so surprising figures can’t be ruled out this year, either. On average, however, Slovakia’s industry should keep its growth trend also during the summer holiday months and at the end of this year,” said Korsnak.

Slovenska Sporitelna bank analyst Katarina Muchova noted that the June deceleration was mainly due to a 16.2-percent y-o-y slump in production of rubber, plastic and other non-metallic mineral products. Nonetheless, this sector doesn’t have a big share on the overall index, and thus the overall industrial deceleration wasn’t so pronounced.

Meanwhile, car production remained the chief workhorse on an annual surge of 9.1 percent.

“The sentiment in Slovakia’s industrial sector remains relatively unstable, even though there was some improvement in July compared to June. The risks included concerns of a possible deceleration of the Chinese economy and its effect on the global economic environment, as well as a rather cautious revival of economic growth in the eurozone. The referendum on Britain’s exit from the EU joined the risks in late June, creating uncertainty in Europe, but the Brexit effect seems to be rather limited at the moment. Although the deceleration in June was rather unsettling, we don’t expect it to last. Industrial production this year overall should continue growing at a relatively good pace,” added Muchova.

The Slovak Statistics Office earlier in the day reported that the country’s industrial output in June went up by 2.2 percent year-on-year.