Hungary's seasonally-adjusted Purchasing Managers Index (PMI) plummeted to 29.1 points in March from 50.3 in February, showing the impact of the coronavirus pandemic, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim) said on April 1.
The PMI has never dropped 40 points before, even during the financial crisis in 2008-2009, economists said. The February decline is much steeper than in Poland and the Czech Republic, local media writes
Among the sub-indices that comprise the PMI, the new orders index and the production volume index both fell sharply under the 50-point mark. The employment index also dropped and was under 50. Delivery times were longer than in February. Purchased inventories were down for the second month in a row after expanding for a period of 37 months, the logistics association said without providing specific figures.
Reality has hit home, commented ING analysts said after the data was released. Hungary is now more integrated into global value chains, meaning that the disruption to supply chains is having a stronger impact on manufacturers. In the past ten years, these manufacturers have also become more integrated in the local economy, with stronger ties to small and medium-sized enterprises. It also means that the shock is hitting at a much deeper level than it did in 2008-2009.
Hungary's three major carmakers announced plans to shut down production temporarily. The vehicle sector accounts for 4-5% of the GDP and a third of industrial output. The February industrial output will only be released in May.
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