Industry output down 0.8 pc in August – KSH (adds analysts)

Budapest, October 12 (MTI) – Hungary’s industrial output was down 0.8 percent year-on-year in August, the Central Statistical Office said on Friday.

Adjusted for the number of workdays, industrial output rose 1.4 percent in August after falling 2.2 percent in July.


Output slipped 0.4 percent in January-August from the same period a year earlier.


Analysts told MTI that industrial production is likely to stagnate in the next few months and an upswing cannot be expected even next year because economic growth will slow down in Hungary’s main export markets and around the world.


The Economy Ministry said it is a favourable development that processing industry orders were 13.2 percent higher in August this year than in the same period of last year. It added that vehicle industry output grew by 2.8 percent and the production of drinks and tobacco also increased by 1.2 percent year on year. The large drop of 15.3 percent in the manufacturing of computers, electronics and optical products made the greatest impact on the development of industrial output, the ministry added.


Senior analyst Mariann Trippon of CIB Bank said that the industrial output figures reflected the decreasing industrial growth in export markets, especially Germany, combined with low domestic demand and a drop in investment. Slightly better performance or at least stabilisation can be expected in the next few months but this will still be insufficient to bring dynamism to industrial production next year. New capacities in vehicle production may lend support but outlook in all other fields is bleak, as demonstrated by the low level of orders, she said.


Analyst of Raiffeisen Bank Zoltan Torok said recent months showed a fluctuation in industrial production, with a slight growth in August compared to the previous month but a drop compared to a year earlier. Restructuring is under way in the processing industry where the vehicle industry represents as much as over 21 percent but a decline in the electrnonics industry that started in the second quarter of last year has continued.


Despite the worsening external circumstances expected in the remaining part of the year, industrial output in Hungary is likely to stay level as a result of sufficient capacity in the vehicle industry that can counterbalance unfavourable trends.


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