The output of the automotive industry, Hungary's biggest manufacturing sector, rose 8.7% year on year in May, rebounding after contracting for several months, the Central Statistics Office (KSH) said on July 13.
The sector, which have been challenged by the semiconductor shortage and supply chain problems in recent months, accounted for 23% of manufacturing sector output in May.
KSH confirmed the preliminary data that headline industrial output increased by 9.4% y/y in May, supported by two more workdays during the month than in the base period. Adjusted for that difference, output rose 3.4%. On a monthly basis, output rose by a seasonally and workday-adjusted 1.4%.
Growth was broad-based, as output of the electronics sector jumped 21.9% y/y. Output of the food, drinks and tobacco segment, which made of 12% of manufacturing sector output, climbed 17.1%.
Industrial sector sales increased 10.8% y/y as domestic sales rose 9.5% and export sales climbed 11.6%. In absolute terms, industrial sector sales reached HUF5.6 trillion. Export sales accounted for 61% of the total. For the period January-May, industrial output increased 5.9% y/y.
Short-term outlooks are still clouded by a number of uncertainties. Supply problems that had eased somewhat at the beginning of the year have worsened again due to the outbreak of the Russian-Ukrainian war, according to analysts. Recession fears are denting consumer confidence and are weakening demand.
Industrial output beat expectations in May and could return to the growth path in the coming months, but disruptions in supply chains remain a significant risk, just like rocketing energy prices, Magyar Bankholding senior analyst Gergely Suppan noted. The bank expects headline growth of 5-6% in 2022, down from 9.6% a year ago.