Industrial Production Decline Slows to 4.3 Percent

Industrial production in Croatia fell by 4.3 percent in November compared to the same month last year, which is a smaller decline than a month earlier and less than expected.

The Croatian Bureau of Statistics announced today that, according to seasonally adjusted data, industrial production in November increased by 1.1 percent compared to October, while it fell by 4.3 percent compared to November last year.

Although significant, this is a milder decline than in October, when industrial production plummeted by 5.8 percent.

This is also a smaller decline than anticipated. Five macroeconomists who participated in a Hina survey estimated on average that industrial production in November slipped by 5.8 percent compared to the same month last year. Their estimates of the decline ranged from 5 to 7 percent.

The decline in industrial activity is primarily due to weak domestic and foreign demand.

“The absence of 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 a lower level of production,” analysts from Raiffeisenbank Austria state in their commentary on the DZS report.

In November, the production of capital goods fell the most, by 18.8 percent year-on-year, followed by the production of durable consumer goods, which declined by 8.1 percent.

The production of non-durable consumer goods weakened by 2.1 percent, while intermediate goods fell by 1.5 percent. In November, only energy production increased year-on-year, by 7.4 percent. In the first 11 months of this year, industrial production fell by 5.5 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,” analysts from Raiffeisenbank Austria note.