KYIV - According to the preliminary estimates of the Ukrainian State Statistic Committee, industrial production growth in November landed at 9.9% Y-o-Y, a slight slowdown compared to results recorded in October (+10.2% Y-o-Y).

Consumer oriented food and light industries added 7.9% Y-o-Y and 12.9% Y-o-Y respectively. Metallurgy output grew by 10.9% Y-o-Y, while the machinery and chemical industry recorded an increase of 39.2% Y-o-Y and 19.8% Y-o-Y respectively. In Y-t-D terms industrial sector production slowed to 10.6%.
The slowdown in Ukraine’s industrial sector production was expected, as the economy has moved into a higher comparison base (manufacturing data showed a brisk pickup in November and December 2010). For 2011, we expect industrial sector expansion to slow to a one-digit growth level.

Machinery, while posting less impressive figures in 2011, should be shored up by the expected industrial rebound in Russia. Metallurgical companies have a downside risk, pressured by rising costs of inputs. Consumer oriented sectors of light and food industries have, in our view, a sizable upside potential driven by rising consumer demand and retail trade.  

NOTE:  Phoenix Capital,, is a member of the U.S.-Ukraine Business Council (USUBC), Wash, D.C.,