Hungarian industrial production rebounds

The volume of industrial production grew by 2.9% month on month in Hungary in September, according to data adjusted seasonally and by working days, the Central Statistics Office (KSH) reported on Friday. This correction, which was already on the cards, comes after two months of decline.

Following the summer production suspensions Hungary’s industry was expected to find its footing again in the autumn. The manufacturing purchasing manager index (PMI) has already signalled that, but previous experience also suggested that the impact of the summer recess in the automotive sector, which has a growing weight in IP, is only temporary.

Hungary’s industry remains on an ascending path. Output grew by 6.7% on average in the first nine months of 2015. The full-year figure may be even higher than that, considering that the end of last year brought about rather poor figures (primarily over a temporary production halt at Suzuki which was switching over to the production of a new model at that time). We can expect some slowdown at the end of this year too, due to the traditional pause in manufacturing, but the base effect is strong enough to support a higher growth figure, portfolio.hu writes.

The key question in the following months will be whether other segments will be able to pick up the pace sufficiently to maintain the strong IP growth momentum, now that the high growth rate of the automotive sector is about to diminish. "We think some slowdown can be expected in the sector because its growth has been closely linked to capacity boosts in vehicle production which are unlikely to be so robust in the coming years. This picture will probably get somewhat clearer once we have the detailed IP data next week, but an even more precise guidance is to be provided by orders data in early 2016," the analysts of the website say.