Output of Hungary's automotive industry, an engine of industrial growth, contracted 80% y/y in April because of shutdowns at the country’s major manufacturing sites, according to the second reading of statistics office KSH from June 12.

The decline in headline industrial output accelerated to 36.8% y/y in April from 5.6% in March and the adjusted data showed a 36.6% decline, up from 10% in the preceding month, in line with the preliminary figure.

On a monthly basis, output fell 30.5% in April, following a 10.4% slide in the previous month, which was the first back-to-back monthly double-digit decline on record.

Vehicle manufacturing fell by 94% and parts manufacturing by 69%. The automotive sector accounted for about 10% of Hungary's industrial output for the month compared to 25-26% on an average month.

Suzuki, Daimler and Audi closed their Hungarian operations for April. The three companies have a combined 5% share of the country's GDP and including suppliers, the vehicle sector accounts for roughly 9% of total output. 

Analysts had been warning that an international recession could hit manufacturing particularly strongly due to the dominant role of highly cyclical industries, such as the automotive sector.

Output of the second-largest sector with a 13% weight, computer, electronics, and optical equipment, contracted 21% in April. Output of food, drink and tobacco products fell 7.9%. The sector generated around 16% of manufacturing output.

Pharmaceutical production increased by 19.4% in part because of the low base effect.

Export volume of the industrial sector decreased by 43% y/y in April as exports of the automotive sector dropped 77% and exports of the computer, electronics, and optical equipment sector were down 23%. Domestic sales of the industrial sector fell 18.6%, with manufacturing sales dropping by 25%.

Order stock in the manufacturing sector dropped 4.7% y/y at the end of April. New order volume fell 42% as new domestic orders were down 34% and new export orders were down by 43%.

For the period January-April, industrial output fell 9.2% y/y. Analysts said it will be key how fast local manufacturers can restore their order books back to normal as Hungary's export markets start to reopen. 

Forecasts for Hungary's GDP vary in a wide range from 3% to 10% and due to the high degree of uncertainty, some analysts did not rule out a double-digit decline for the industry in 2020.