Industry declined 1.4% y/y in December
The December industrial output figures published this morning surprised on the downside. According to CSO’s preliminary statistics, the adjusted y/y figure still showed a decline (-1.4%), remaining well below our expectation of +4.8% y/y. The unadjusted y/y figure was slightly positive (+1%), practically due to the base effect. The great disappointment however was the monthly figure, showing that the performance of industry decreased by 5.7%, compared to November. This was the second consecutive month of a fall in the output, suggesting that the overall performance of the sector is still seen as fragile and reinforcing that the expected export-based recovery in Hungary will be slower than in other CEE countries.
The PMI index in January jumped to 53.5 from 49.1, seen in December, while the German IFO index also was favorable in January. These suggest better industrial output figures for the first month of the year in Hungary. On the other hand, German orders figures were also disappointing, showing that manufacturing orders dropped by 2.3% m/m in December. Thus, the latest indicators which could help to predict the performance of the sector in Hungary in the near future are seen as mixed, making more difficult clearer judgments.
