Hungary’s industrial production grew 4.8% y/y in June (chart), up from a 3.4% increase in the previous month, according to working-day adjusted preliminary data from the Central Statistics Office (KSH) on August 5. On a monthly basis, output rose 0.6%.

Despite the unfavourable circumstances, notably the Russian-Ukrainian war, the shortage of spare parts and rising energy prices, industrial production expanded both on a monthly and annual basis, and the sector's performance was better than expected

The unadjusted data showed an increase of 1.5%, slowing from 9.4% in May, as there were more workdays than in the base period. Detailed data will be released next week, but KSH said output of the manufacture of transport equipment and that of electronics and optical products increased to a lesser degree, while growth was higher in food and beverage production. Output of other subsectors declined.

 

In the first six months, output fell 5.1% y/y.

Industrial production returned to levels seen at the beginning of the year, which suggests that manufacturers managed to bridge supply disruptions caused by the war, ING Bank Peter Virovacz said.

ING bank is less optimistic about the outlooks in the industry and the economy as a whole, as there are clearly signs of weakening economic activity. The soft landing has already started, it added.

Industrial production has slowed slightly in Q2, after a strong expansion in the previous three months, and was virtually stagnant compared to the previous quarter, Magyar Banholding analyst Gergely Suppan said. The economy could benefit significantly in the medium term from investments by BMW and Mercedes and from the build-up of defence industrial capacities, he added.

Hungary’s industrial production in June was up 71.1% from its April 2020 trough, up 25.4% from the 2015 average and 53.3% above the average.

Analysts queried by state news agency MTI did not give projections for the sector for 2022.