Slovakia’s industrial output fell by 5.2% year on year and by 7.3% month on month, significantly deepening its mild December dip of 0.1% y/y and ending the growth period registered for much of the second half of 2024.

The figures arrive as the country’s key car industry is bracing for an impact of 25% tariffs set to be introduced on the EU’s imports by the Donald Trump administration.

“Despite a higher manufacture of vehicles, industrial production failed to stabilise. Its decrease was significantly affected by a sharp decline in metal production, energy-related production, manufacture of machinery and equipment,” Slovak statisticians summed up.

They noted that the January y/y decline was the deepest one since March 2024. Nine of the fifteen monitored sectors were in decline.

Marián Kočíš, macroeconomic analyst at Erste’s branch Slovenská sporitelna highlighted that uncertainties persist in the country’s industry amid subdued performance of the EU and mainly German economy, Slovakia's key export destination.

“As a small and open economy Slovakia is particularly sensitive to risks of trade wars which can have a significant influence on our producers,” Kočíš was quoted as saying by the Slovak press agency TASR.

He added that “the upcoming months are likely to bring a high level of uncertainty, which will come as an additional burden for the industrial sector and exporters.”

UniCredit Bank’s analyst Ľubomír Koršňák pointed out for TASR that a positive impulse will come from “a more loosened monetary policy of the European Central Bank,” which last week lowered interest rates further down by 25 basis points to 2.65% in a sixth lowering since last June.

“As the year progresses, the industry could also begin to get a positive impulse” from the ECB policy, “which should with some delay get reflected in the restart of demand after investment goods in Europe,” Koršňák added, noting that such development could boost export “just before the imposition of new American tariffs.”

Metal production fell by 17% y/y, while electricity, gas, steam and air-conditioning supply was by almost 18% in January, falling into decline after almost a year of consecutive growth. Manufacture of transport equipment grew by close to 12%, manufacture of machinery fell by nearly 19%, and manufacture of electrical equipment slowed down by more than 10%.