Hungary’s industrial production rose by 1.5% month on month in April 2025, marking the second consecutive month of growth, a trend not seen since the summer of 2022. However, the overall picture remains bleak, with output still down 5% year on year (chart)  and 2.3% when adjusted to working days, the Central Statistical Office (KSH) said in a detailed reading on June 13.

Production dropped in the great majority of manufacturing subsections, at the highest rate in the manufacture of electrical equipment, down 16.7%, the KSH said. This product category includes battery production, which has continued to underperform and drag down the headline data.

Data show the sector has been in negative territory since early 2024, with the annual rate of decline exceeding 40% at its worst point in early 2025. The fresh figures suggest a narrowing in the pace of contraction. The prolonged slump underscores the mounting challenges facing Hungary’s EV battery ambitions, as global overcapacity, cooling demand and domestic operational setbacks weigh on production. The performance of the battery sector contrasts sharply with government rhetoric positioning Hungary as a key European hub for EV supply chains.

Losses reported by the two key battery manufacturers operating in Hungary, Samsung SDI and SK On, totalled HUF45bn (€110mn) last year.

The performance of the automotive industry, Hungary's biggest manufacturing sector with 27% weight, also weighed negatively on April industrial data, falling 4.1% y/y.

Output of the food, drinks and tobacco segment, generating 13% of the sector's output, slipped 4.0%.

The volume of total new orders was 12.2% lower compared to the base period, while new domestic orders rose by 2.4%, and new export orders dropped by 14.4%. The total stock of orders at the end of April was below the previous year’s level by 16.2%

Industrial production decreased by 4.5% y/y in January-May. The volume of export sales, representing 63% of the total declined by 0.9%, domestic sales, accounting for 37%, fell by 3.1%.

Analysts warn that the monthly uptick in industrial production may be driven by temporary factors rather than a sustainable turnaround. Capacity expansion from major foreign investments may only start supporting growth in 2026. Chinese NEV maker BYD and the world’s leading EV battery maker CATL are expected to start operation later this year. BWM is also set to start serial production of e-vehicles at its new plant in eastern Hungary (Debrecen).

Most analysts agree that, as was the case last year, the industrial sector is likely to weigh on economic growth, which is expected to remain subdued at around 1% or less, according to both analysts and international institutions.