Infographic: Industrial production falls in September 2018

In terms of industrial production, NSI data show that the sector recorded its most serious decline since February. This is mainly due to a serious slowdown in the growth of production in the manufacturing industry to 0.78% from 4.26% in August and to a lesser extent to the more severe decline in the production and distribution of electricity and gas compared to the previous month. Only in the mining industry is there any improvement, where the decline in production weakened by about 5 pp to 12.24% in September.

In terms of industrial turnover (sales), in August, sales in the industrial sector (total) grew by 2.40%, compared to 4.81% in July. This slowdown is due to both a slowdown in turnover on the domestic (Bulgarian) market and on the external one. Sales growth on the external international market in August slowed to 3.91% on an annual basis from 7.76% in July, while growth on the domestic Bulgarian market slowed to 0.58% from 1.95%.

Comment

The currency crisis in Turkey may have some effect on the industrial sector in our country, given the fact that our neighbor is one of the main destinations for Bulgarian exports. The fact that turnover is growing at a faster pace, however, may be an indication that the decline in production will be only temporary, although the crisis in Turkey remains serious. A return to growth in production in October is quite likely, despite the undeniable fact that in the first nine months of 2018, industrial production has seriously slowed down its growth (the average value for the period is 1.13%). This is a clear indication that the years of serious upswing in the industrial sector within this business cycle are most likely already behind us and in the future growth will continue to be moderate to relatively weak.

Data source: NSI

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