The slowdown was mainly caused by shifting of holidays in car companies from July to August. Hence, annual growth in transportation vehicles manufacturing slowed down from 83 to 77 %. In spite of that, cars remain the main driver of growth, contributing to the annual growth in industrial production with 16 percentage point (as compared to 18 in July). Other industries improved slightly. Due to this fact, industrial production was higher than in July by 0.4 % even on a seasonally-adjusted basis. Without the manufacture of transportation vehicles, the overall industrial production would be growing by mere 1.5 %.
While the development in industry is still positive, construction output keeps falling with the annual rate of contraction reaching 15.4 % in August. We are likely to see an improvement only after the ongoing tenders for highway construction are finalized.
In the coming months, we expect a slowdown of the annual industrial production growth due to weaker demand from Eurozone and Asia. Hence, industrial production could increase by 13.5 % y/y in September.
Growing industrial production is closely related to foreign trade balance. Recently, the data for 2011 have been revised downwards from EUR 2.5bn to EUR 1bn. This revision is related to incorrect reporting by a major exporter. In August, trade balance fell significantly from EUR 376mn to EUR 23mn, mainly as a result of higher imports. As the breakdown of foreign trade for August will be published only next month, we cannot rule out that one-off effects could be responsible for the drop. Foreign trade surplus in the last 12 months amounts to about 4 % of GDP.