Industrial production in January dropped by 5.1%

Industrial production in January 2020 dropped by 5.1% against January last year and by 8.4% against December 2019.  A steady downward trend was recorded since June last year,

according to the State Statistics Service.

In January, production of steel and finished steel products declined by 10.3%, while mining of metal ores by 1.5%. In the first month of the year, production of steel dropped by 0.4% to 1.843 million tons, and pig iron by 3.3% to 1.729 million tons. Production of rolled products grew by 7.3% to 1.68 million tons.

It has to be noted that the Cabinet of Ministers of Ukraine has recently approached the idea of introducing the post of Vice Prime Minister for industry and launching real sector support programs.  Specifically, the Ministry of Economy proposes to annually allocate ₴15–17 billion of budget funds for industrial development starting 2021.

Industrial producers expect a drop in capacity utilization rate in Q1 2020.  Industrial producers surveyed by the State Statistics Service say that the impact of insufficient demand will increase, and this is one of the factors that slows down industrial production. At the same time, the impact of such factors as lack of labor force, raw material, materials and equipment on industry is expected to lessen. In general, in Q1 2020, the business confidence index in the industry fell by 0.1 pp to 5.7% compared to Q4 2019.

As reported earlier, Ukraine’s industrial production in 2019 decreased by 1.8% against 2018. Last year, production of steel and finished steel products declined by 3.1%, while mining of iron ores remained unchanged.