In Bosnia-Herzegovina industrial output fell by 3.4% y/y in June after rising by 6.1% y/y the previous month, swinging into negative territory for the first time since May 2017, according to the latest data by BiH statistical office. Seasonally-adjusted industrial production declined by 4.1% m/m.
The deceleration was broad-based. The output of the heavily-weighted and export-oriented manufacturing sector fell by 5.6% y/y in June after a 2.0% y/y rise the month before. The strongest drops were seen in manufacturing of coke and refined petroleum products (53.4% y/y) and of basic metals (28.1% y/y). Mining output also swung into negative territory dragged by steeper fall in mining of metal ores. Utilities output growth decelerated further to 8.3% y/y in June from 20.5% y/y in May.
Industrial production expanded by 3.3% y/y in H1. Utilities output expanded by 16.1% y/y in the first half of the year, while mining output increased by meagre 0.1% y/y. Manufacturing output was down by 0.1% y/y in H1. Despite the poor performance since the beginning of the year, we expect the manufacturing sector to recover benefitting from the strong external demand. The headline print should be also supported by the energy sector after the waning of the effects of last year’s drought.