Industrial production decelerated in March from 6.9% to 5.6% year-on-year, which was still above the market consensus of 4.5%. Sector performance remains decent, given negative calendar effects and a lower contribution from mining and utilities. The difference in working days subtracted two percentage points from the headline figure, with the seasonally-adjusted rate coming in at 7.8% YoY.
Strong manufacturing output is related to the extraordinary performance of transport equipment producers (37.2% YoY), which should not be repeated in the coming months. Activity in export segments remained solid – production of electrical equipment expanded in March by 15.4% YoY, with electronics and computer equipment up by 9.6% YoY. Also, areas closely linked to the construction sector achieved decent results.
Despite a strong manufacturing performance, we still expect GDP to moderate in 1Q19 from 5.3% to 4.2-4.4%YoY. Construction and transportation sectors should provide much lower contributions compared to the previous quarter. We also expect some moderation in retail & wholesale trade.