Industrial Production hit by summer production shutdowns

Industrial production recorded year-on-year growth of 9.2 percent in July, influenced primarily by growth of 10.2 percent in industrial manufacturing and 4.1 percent in supplies of electricity, gas, steam and air-conditioning components, the Slovak Statistics Office reported on Monday. "Even after taking seasonal adjustments into account, most sectors showed a monthly drop in production, which signals a stronger "holiday effect" than usual, said Lubomír Koršňák, an analyst with UniCredit Bank Slovakia and Czech Republic. That said, the slowdown was less pronounced than in the summer of 2016. This is partly because a portion of the car-manufacturing industry, excluding Volkswagen Slovakia, scheduled this year's summer shutdown later than in previous years. "The sentiment in the European industry and consumer confidence in Europe remain relatively strong, which should augur well for the shape of the Slovak industry. After the weaker spring, confidence in Slovak industry as measured by the Economic Sentiment Indicator (ESI) also recovered in August. We expect the annual growth in production to range between 4-5 percent during most of the second half of this year. Slovakia's industrial growth could remain slightly above zero in annual terms in August, but a mild annual fall in production isn't out of the question either," said Koršňák.