Industrial Production Rises for the Seventh Consecutive Month

In August, industrial production in Croatia increased by 2.8 percent year-on-year, marking the seventh consecutive month of growth, although this was below expectations and slower than the previous month.

The Croatian Bureau of Statistics (DZS) announced on Tuesday that industrial production, according to seasonally adjusted data, fell by 4.1 percent compared to the previous month, while calendar-adjusted data showed a 2.8 percent increase compared to August of last year. This marks the seventh consecutive month of production growth, albeit at a slower pace than the previous month, when it strengthened by 3.9 percent year-on-year. This is also a slower growth than anticipated. Four macroeconomists who participated in a Hina survey estimated that industrial production in August increased by an average of 4.4 percent year-on-year. Their growth estimates ranged from 4 to 5.5 percent.

– In addition to the base period effect, the continuation of positive annual growth rates in industrial production has been significantly supported by the recovery of foreign demand, analysts from Raiffeisenbank Austria (RBA) noted in their commentary on the DZS report.

In August, the production of capital goods surged the most, by 14.7 percent year-on-year, followed by the production of non-durable goods for general consumption, which rose by 7.8 percent. The production of durable goods for general consumption increased by 7.0 percent. On the other hand, the production of intermediate goods fell by 6.7 percent year-on-year in August, while energy production slipped by 1.7 percent. Overall, in the first eight months of this year, industrial production was 1.9 percent higher compared to the same period last year.

– Due to the exceptionally low base, as well as the continued growth of foreign demand and a slight recovery in domestic demand, we expect the continuation of positive annual growth rates in total industrial production by the end of the year, conclude RBA analysts.

If their forecasts materialize, 2015 would be the second consecutive year of production growth. Last year, the industry strengthened by 1.3 percent compared to 2013, marking its first annual growth after five years of continuous decline.