Slovak industry slowed down again in April, not even the higher manufacture of transport equipment could positively affect the result

In the fourth month, most sectors of industrial production struggled with significant year-on-year declines, which generally could not be covered even by the growth of the crucial manufacture of transport equipment as well as manufacture of metals. The key sector of the economy had its second-lowest April performance since 2016, right after the 2020 Covid-19 shutdown.

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Industrial production¹⁾ of the SR decreased by 2% year-on-year in April 2023. The industry thus continued the stagnation at the end of last year and the beginning of this year. The key sector of the Slovak economy in April 2023 produced a value that was only less than 3% above the average performance in 2015. In a long-term comparison, this was the worst April performance since 2016, with the exception of 2020, when the onset of the pandemic completely stopped production in some sectors. Comparison with the average of 2015 (the so-called base index) enables an objective assessment of the industry's performance over a longer period of time.

The most significant decrease was recorded in manufacture of rubber and plastic products by 9.4%. The influence of sectors is expressed through the so-called contributions³⁾, which take into account the rate of an increase/decrease combined with the weight of the sector in industrial structure and enable the hierarchization of the effects of individual sectors, this was an impact of minus 1.05 percentage points (p.b.) on the result of the sector.

This was followed by the impact of more than a quarter decrease in manufacture of computer, electronic and optical products (contribution -0.60 p.p.), further more than a 15% decrease in manufacture of wood and paper products (contribution -0.57 p.p.), and a decrease of less than 8% in manufacture of food, beverages and tobacco products (contribution -0.39 p.p.).

However, the cumulative effect of the decrease in the performance of 9 out of 13 monitored groupings of industrial sectors (special groupings)²⁾ of industry was largely dampened by the fact that the most important structures were in positive numbers and that in pharmaceutical industry there is a growth in manufacture of transport equipment by 7.9% (contribution +1.82 p.p.), a high year-on-year performance increase by more than 43% in manufacture of basic pharmaceutical products and preparations (contribution +0.32 p.p.), and a very moderate growth just above zero in manufacture of basic metals and fabricated metal products and in manufacture of machinery.

On a month-on-month basis (compared to March 2023), after seasonal adjustment, industrial production decreased by 1.2%.

In terms of breakdown according to the main industrial groupings, only the production of investment funds increased by 3.8% year-on-year. Other components were in year-on-year decline, namely production of durable goods by almost 16%, production for intermediate consumption by 6%, production related to energy by 4% and production of short-term consumption goods by 2%.

In total, for the four months of 2023, industrial production decreased by 3.1% year-on-year. The most significant impact was the growth in manufacture of transport equipment by 7.4% (contribution +1.83 p.p.), which, with the support of milder growth in the other four sectors²⁾ of industrial production, at least partly compensated for the declines in most sectors of industry, with the most influential decline in manufacture of rubber and plastic products by 9.1% (contribution -0.94 p.p.) and in manufacture of computer, electronic and optical products by 28.5% (contribution -0.72 p.p.).