Industrial output increased by 5.7% y/y in April, accelerating from the 4.2% y/y (revised from 4.1%) a month before, according to preliminary data published by the statistical institute today (all prints in wda & sa terms). Thus, industry somewhat revived in April, but its performance remained below the Q1 average. Growth acceleration in April was exclusively on the back of manufacturing, which reflects a better mood in industry following exports’ improvement in the month.
The speeding of manufacturing growth in April was mostly fueled by some strong rises in production of electric equipment, machinery and equipment and road transport vehicles. Those segments mostly sell abroad. At the same time, apparel industry and refining reported double-digit drops y/y in April, dragging down better industrial performance. Production in mining decreased moderately after constant growths in more than a year. The output fall was triggered by the oil and gas segment, whereas metals production kept on rising robustly. Utilities output also decreased in April, probably over the high base, as weather was warmer in 2018 compared to the same period a year before, so demand was weaker.
Generally, industrial output revived in April, encouraged by export rebound. Still, growth was way smaller than in 2017 and at the beginning of 2018. Domestic demand for industrial products would probably remain weak, as long as construction sector outlook remains gloomy due to low public investment and falling private investor interest. Thus, manufacturing would very likely remain intensely dependent on external developments.