The decline in Hungary’s industrial output was the fourth-highest in the EU in August, according to Eurostat.

On an annual basis, industrial production edged up 0.1% in the eurozone and by 0.2% in the EU, while output in Hungary fell 4.1%, according to detailed figures from the Hungarian statistics office KSH.

The raw figures showed a 9.5% (chart) decline, partly due to fewer working days in the base period. Compared to July, output fell 0.5%, which is in line with the preliminary data.

The volume of industrial exports was 6.3% lower than a year earlier, and domestic sales of the industry fell by 7.3%.

The output of the automotive industry, accounting for a quarter of manufacturing output, fell 12.4% year-on-year in August. Within this category, the production of batteries plunged 24%.

The output of the electrical equipment segment, which made up 11% of manufacturing output, declined 15.7%.

 

Domestic sales of the industry fell by 7.3% and manufacturing by 10.6% compared to the same month a year earlier.

The stock of new orders was 10.9% lower compared to the base period, as new domestic orders dropped by 14.5%, and new export orders fell by 10.2%. As a result, the total stock of orders at the end of August was below the previous year’s level by 26%, KSH said.

The outlook for Hungarian industry has deteriorated further in Q3, analysts of MBH Bank said in a quarterly macroeconomic update on October 15. Companies in Hungary perceive the current demand shortfall as more severe than during the pandemic. While demand shortages are felt across the region, the situation is most acute in Hungary.

Sectors focusing on the domestic market, such as the food industry, are performing better than export-driven industries, mainly due to the weak demand in Germany, Hungary’s largest trading partner.

MBH Bank predict a 3.2% contraction in industrial output this year, after a 5.5% decline in 2023.