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Slowing car production prompts Slovak industrial output decline
February 8, 2013 / 9:56 AM / 5 years ago

Slowing car production prompts Slovak industrial output decline

* Slovak industrial Output weakest since Oct. 2009

* Decline in car production, first in 3 years, key reason

* Q4 growth seen taking bigger hit, rebound to follow

By Martin Santa

BRATISLAVA, Feb 8 (Reuters) - Slowing car production in Slovakia prompted a fall in industrial production for the first time in three years in December, painting a bleak picture of the euro zone country’s performance in the last quarter of 2012.

The euro zone crisis has dented appetite for new cars and any weakening of foreign demand hurts Slovak heavily export-reliant economy badly. Domestic demand remains frozen due to jobless rate at 8-year highs and weak investment activity.

December output fell by 4.4 percent on the year, its first drop since October 2009, following a 5.2 percent rise in November. It suffering from 10.0 decline in automotive production, key engine of the country’s growth, data showed on Friday.

For the year as a whole, however, industrial production rose a 10.3 percent, after 7.2 percent reported in 2011.

The economy is expected to its expansion this year to 1.2-1.3 percent in 2013 from 2.3-2.4 percent in 2012.

“Industrial production ... shows a visible decline across all sectors and there was a significant drop in the growth’s driver - the car production,” said Lubomir Korsnak, analyst at UniCredit Bank in Bratislava.

“Downside risks to the Q4 growth have significantly intensified,” Korsnak said. “External environment is the key reason behind (December) domestic data.”

The country’s statistics office will publish the flash estimate for economic growth for the October to December period on Feb. 14.

The central European country’s car sector is centred on assembly plants run by Germany’s Volkswagen, France’s PSA Peugeot Citroen and South Korean Kia Motors Corp..

A separate data release showed December foreign trade showed a wider-than-expected surplus of 130.9 million euros, attributed by analysts mainly to slowing imports, narrowing from a revised 315.7 million euro surplus in November.

For the full year of 2012 data showed a 3.637 billion euro surplus, the country’s highest since at least 2004, according to the statistics office available historical database. (Editing by Jeremy Gaunt)

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