The output of Hungary’s vehicle sector, with a 26% weight in output, grew 23.5% y/y in March, the Central Statistics Office (KSH) announced on May 12 after it confirmed headline data showing industrial output fell for the third straight month in a row. 

Hungary’s industry fell 4.1% y/y (chart) during the month, and by 4% when adjusted for working days.

Compared to the previous month, output edged up a seasonally- and workday-adjusted 0.2%. In the first three months, output contracted by 3.1% y/y.

The slowdown in industrial production since the beginning of the fourth quarter of last year was mainly due to weaker growth of energy-intensive sectors and energy-producing sectors. Weakening domestic due to high inflation and external demand is leading to subdued output in the food industry, according to analysts.

 

Predominantly export-oriented sectors are keeping production afloat.

Capacity expansions in the automotive sector and in battery production could lead to a substantial rebound in production but depend mainly on the recovery of the global economy, they added.

Output of the electronics sector, with a 9% share, fell 14% and that of food, drinks, and tobacco segment, which made up 12% of the manufacturing sector output, decreased by 13.3%.

Export sales edged up 0.4%, but domestic sales dropped 17%.

In absolute terms, industrial sales reached HUF6.5 trillion (€17.5bn). Exports sales accounted for 59.5% of the total.

The volume of total new orders was up 6.3%% as domestic orders dropped by 13.4% and new export orders rose by 10.2%. The total stock of orders at the end of March was above the previous year’s level by 7.5%.

Analysts said the weak industrial data will be a drag on Hungary’s GDP in the first quarter, likely to show a contraction both in quarterly and annual terms. KSH will release the figures on May 16.