HU: Industry remained sluggish in March

Volume of industry dropped by 5.4% y/y in March, according to the working day-adjusted statistics. The actual figure was slightly weaker than our estimate and the Bloomberg consensus. The unadjusted yearly figure showed a stagnation, due to higher number of working days this March. On monthly level, the output rose by a mere 0.1% (swda), still indicating subdued performance. In the first three months of the year industrial production was 4.4% lower than in the same period of 2024.

More details on the figures will be released on May 14. According to the CSOs short comment, out of the subsections having the largest weight the manufacture of transport equipment, the manufacture of computer, electronic and optical products, as well as the manufacture of food products, beverages and tobacco products grew, while the manufacture of electrical equipment products dropped.

Todays figures have again reflected weak external demand and general problems surrounding car manufacturing. Our largest export partner, Germany, started the year well, but optimism has waned since the escalation of the trade war. Volatility of tariffs and the global trade conflict are causing general uncertainty, extended by the introduced moratorium. As a result, a wait-and-see attitude may dominate domestic players' behavior, leading to further postponement of investments and production. Positive growth impact from earlier capacity expansions is expected mainly from 2026, but uncertainty has significantly increased in this field, as well. The planned economic stimulus measures by major European economies could be supportive, but timing remains critical, and favorable effects may take time to become apparent. Today's figures reinforced that industry remained a drag on GDP growth in 1Q25.