Industrial Production Fell Less Than Expected

Industrial production in Croatia fell by 5.8 percent in October compared to the same month last year, which is, in line with expectations, a smaller decline than a month earlier.

The Croatian Bureau of Statistics announced today that, according to seasonally adjusted data, industrial production in October increased by 1.0 percent compared to September, while it fell by 5.8 percent compared to October last year. Although sharp, this is a milder decline than in September, when industrial production plummeted by 7.7 percent, and it is also in line with expectations.

Five macroeconomists who participated in Hina’s survey estimated on average that industrial production in October slipped by 6 percent compared to the same month last year. Their estimates of the decline ranged from 5 to 7 percent.

-Industrial production in October, in line with expectations, continued the negative trend. The decline in production in October of 5.8 percent year-on-year is somewhat smaller than in September, but it remains relatively high, especially considering the duration of negative trends-, state analysts from Raiffeisenbank Austria in their commentary on the DZS report. In October, the production of capital goods fell the most, by 17.3 percent year-on-year, followed by the production of durable goods for general consumption with a decline of 5.4 percent.

The production of intermediate goods weakened by 3.5 percent, while energy production slipped by 2.5 percent, and the production of non-durable goods for general consumption fell by 1.6 percent. The decline in industrial activity is primarily a result of weak domestic and foreign demand.

-Persistent weakness in domestic demand, along with an unfavorable external environment and weaker foreign demand, negatively affects trends in industrial production. The restructuring of the largest companies also contributes to the lower level of production-, state analysts from Raiffeisenbank Austria. In the first ten months of this year, industrial production fell by 5.6 percent compared to the same period last year.

-Thus, this year will see a continuation of the decline in industrial production on a year-on-year basis, marking the fourth consecutive year of negative trends-, conclude analysts from Raiffeisenbank Austria.