Following a return - even if feeble - to growth in November, Hungarian industry slumped back into decline in December, statistics office KSH reported on February 7.
Output decreased 0.5% y/y in non-adjusted terms in the final month of a bumpy year for Hungarian factories. Adjusted for working days, production rose 1.9%.
Largely the result of some strong bursts in the first half of the year, Hungarian industry finished 2016 with production just 0.9% higher. The reading is hugely disappointing compared to the impressive 7.5% expansion seen the previous year. The 2016 reading represents the weakest result for Hungarian industry in four years.
The struggles were mainly due to a bumpy year for the auto sector. In December, the car industry was again the main culprit, KSH said in a statement.
The subdued results are likely due to pauses in production at the Hungarian factories of German carmaker Audi in the final month of the year. At the same time, the manufacture of computers and electronic equipment performed better than in previous months.
Also on the bright side, output increased 0.5% in monthly terms in December, which represents the the third monthly increase in a row. KSH will issue a detailed estimate on January 12.
Looking ahead, a steady recovery of economic sentiment and a strong PMI reading in January offer hope for a pick-up of Hungarian industry at the start of the year. Industrial output is expected to slightly increase in 2017, but will remain well below the 7-8% y/y growth rate seen in 2014 and 2015, analysts at Erste Bank predict.