Hungarian industry returns to growth in April

Hungarian industry returns to growth in April
By bne IntelliNews June 7, 2016

Following five straight months of decline in a row, Hungary's industrial sector returned to growth in April, statistics office KSH reported on June 7.

Unadjusted industrial production increased 5.3% y/y and 5.4% m/m in the fourth month of the year. While the extended turn of the year slowdown in industrial production – mainly due to a drop in the auto sector – contributed to feeble GDP growth in Q1, a recovery in the industrial sector should help improve the economic outlook for the second quarter.

Adjusting annual output in April made no difference to the headline figure, and followed a 2.4% y/y decline in March. The two-year average is around 7%, and growth peaked at 12.7% in October. However, industrial production increased just 0.3% y/y in Q1 2016.

Performance improved in all segments of industry in April, except for the food sector, KSH said. The stats office will issue a second estimate on June 14 that will reveal details. However, it seems likely that the stabilisation of growth reflects a recovery in the auto segment. Output decreased to at leasat some degree in the first quarter due to technical switchovers at Audi and Suzuki.

Carmaking drove impressive growth in industrial output last year. However, it is becoming clearer that the potential of carmaking to unbalance the entire industrial sector is an issue for Budapest. In March, it was mainly the 14.4% y/y decrease in the manufacture of motor vehicles that drove industry data into the ground.