On monthly basis, industrial production increased markedly in September
- Industrial production again surprised on the upside in September, as it fell only by 5.2% y/y (after a revised -6.3% y/y in August). The market expected around -10% y/y, we forecasted -13% y/y.
- After seasonal adjustment, the industrial production grew by 4.6% m/m (Slovak Statistical Office published seasonally adjusted figures for the first time), which is even more impressive after monthly growth by 5.5% a month ago. We expected that the strong growth in August was also due to different timing of holidays compared to season and expected correction. Moreover, the industrial sentiment worsened, so we anticipated monthly decrease of industrial production.
- The monthly growth was not driven by traditional drivers, such as cars and electronics but rather an uneven mix of sectors, including textiles, metals, electrical production and machinery. The recovery thus seems broad-based.
- Although it is still below last year's levels, industrial production is well above the minima seen in December and January. During the whole 3Q09, the industrial production grew by 9% q/q after seasonal adjustment. Due to around 30% share of industry within GDP, the risks for our 3Q09 GDP forecast at 4.9% y/y (market: -5.5%) might be skewed for the better (Statistical Office should publish the figure on Friday)
- See also the chart at the next page.
