Mar 11, 2016

Hungarian Industrial Sector Expected to Further Expand This Year

In January 2016, data adjusted for workday-effects show that industrial output rose year-on-year by 2.2 percent. Following last year’s dynamic growth of 7.7 percent, the presumably transitory slow-down was the result of car industry production breaks at the end of the year.

Within the manufacturing sector, both the electronics and metal products manufacturing sectors posted double-digit output growth. The Ministry for National Economy is expecting massive industrial sector expansion in the remainder of the year. Recent order data confirm this anticipation.

In January 2016, in light of unadjusted data the volume of industrial output edged down by 0.2 percent year-on-year, while workday-adjusted statistics showed an increase of 2.2 percent. In the month of January, the manufacturing and energy sectors posted growth of 0.3 percent and 2.1 percent, respectively. Among larger manufacturing sub sectors, output at motor vehicle manufacturers, which account for some one-third of total output, fell by 3.5 percent year-on-year, due to production breaks at the end of last year. On the other hand, output of road vehicle components and rubber products grew by 6.6 percent and 1.8 percent, respectively.

Upbeat Hungarian confidence indicators are pointing at future growth. The fact that the total stock of orders was up by 11.2 percent year-on-year also indicates further output gains.

Although the high base due to remarkable industrial output growth in the past two years is likely to lead to relatively low volume increases in 2016, Hungary’s industrial sector is expected to grow in a sustainable, balanced manner. The Government aims to help achieve steady expansion through the implementation of the Irinyi Plan.