The output of the automotive industry, accounting for 28% of the manufacturing sector, edged up 1.6% year-on-year in February, rising after a three-month decline, the Central Statistics Office (KSH) said.

KSH confirmed that headline industrial output rose 1.8% (chart) in February, increasing for the first month in about a year. February output rose 1.4% when adjusted for the number of workdays. In a month-on-month comparison, output increased a seasonally- and workday-adjusted 3.5%.

Hungary’s industry kicked off the year on a weak note, extending the downturn that started in the autumn of 2022. The level of output is similar to that in late 2020 and early 2021.

Industrial output dropped by around 5% last year amid weakening external demand and a persisting setback in domestic demand. The outlook of the country’s export-oriented industry is clouded by uncertainties in major EU markets, including Germany, Hungary’s largest trading partner.

 

Moreover, the sector’s plan to invest is at the lowest level in the last 14 years.  New export capacities in battery manufacturing and the vehicle sector could counterbalance these negative impacts. In a recent report by UniCredit, the contribution of the sector to GDP in 2024 could be just 0.1pp, rising to 0.6pp by 2026.

Among other major components, the output of the electrical equipment segment, which made up 11% of manufacturing output, edged down 0.8%.  The production of the computer, electronics and optical equipment segment, accounting for 9% of manufacturing, fell 1.5%.  On a positive note, output of the food, drinks and tobacco segment, which made up 12% of manufacturing sector output, rose 10.3%.

Industrial output edged down 0.9% year-on-year in the first two months.