The ongoing struggle of the vital carmaking sector to stabilize, together with a decline in other important segments, dragged Hungarian industry to a decline for a second consecutive month in October, data from the statistics office KSH showed on December 14.

Overall output dropped 2.1% y/y in October, the figures show, confirming a flash estimate from a week earlier. The poor start of industry to the final three months of the year suggests the economy is unlikely to meet the government’s target of 2.5% for full-year growth.

While encouraging PMI readings in recent months, together with increased sentiment in industry have offered hope for an improvement in industrial activity, the 6.7% y/y decline in new orders in October dents that optimism.

Hungarian industry has struggled to raise its game to help consumption make up for an expected weak 12 months of investment since the very start of the year. Output has increased in only four months of 2016 thus far, while drops have been recorded in six.

The ill-effects of the auto sector’s struggles have been evident throughout. In October, the production of transport equipment – representing 30% of Hungarian manufacturing output – declined 1.4% y/y. The manufacture of motor vehicles dropped 6.7%, while output of parts and accessories rose 5.2%.

Carmakers were not the sole culprits, however. The manufacture of rubber and plastics products declined by 1.9% and the manufacture of basic metals and fabricated metal products decreased by 4.8%. The manufacture of machinery and equipment fell 2%.

At the same time, computer, electronic and optical production – having the second largest weight in manufacturing output – grew 2%. The pharmaceutical sector, representing a smaller weight, grew 6.6%.