HU: Another disappointing industrial output figure
Volume of industry dropped by 5.4% y/y in September, according to the working day adjusted figure, that was somewhat weaker than both our estimate and the Bloomberg consensus. The unadjusted yearly figure showed a decline of 7.2% in September. On monthly comparison, industrial output further dropped, by 0.7% (swda). In 1-3Q 2024, production was 4.3% lower than in the same period of 2023.
More details on the structure of the output will be released on November 13. According to the CSOs usual short comment, production volume decreased in the great majority of the manufacturing subsections. A fall was observed in the manufacture of transport equipment, in the manufacture of electrical equipment, as well as in the manufacture of computer, electronic and optical products, while the manufacture of food products, beverages and tobacco products increased. Thus, the base picture did not change in September, either: we can see generally weak industrial figures, within which the drop of vehicle manufacturing is the most significant, on the back of subdued external demand.
Performance of the domestic industry has been on a declining path for two years now. Weak flash GDP figures for 3Q24, published last week already indicated that the September industrial figures would also be rather poor. Short-term outlook remained rather dim. Plant closures and large-scale downsizing of the German manufacturers might have negative impacts in Hungary, as well. In the medium term, as big capacity expansions enter the production - mainly in the vehicle industry and in the field of battery production this may result in a recovery of output, probably starting from the second half of next year. According to press information, the BMW factory in Debrecen may be the first to start the production next year. However, still the lack of external demand has remained the most relevant risk that may result in further delay of the start-up of production. Industry is set to be a negative contributor to GDP in 2024, as well, similarly to the last year.