HU: Industry surprised to the downside
Todays industrial output figures surprised to the downside. The volume of industry declined by 2.6% y/y in May, according to both the working day-adjusted and unadjusted statistics. The actual figure was worse than our estimate and the Bloomberg consensus. It was rather unfavorable that on a monthly level, the output dropped again by 1.3% (seasonally and working day adjusted), showing that the April improvement was just a one-off. In the first five months of the year, industrial production was 4.1% lower than in the same period of 2024.
More details on the figures will be released on July 15. According to the CSOs short comment, production volume decreased in the great majority of the manufacturing subsections compared to the same month of the previous year. Out of the subsections having the largest weight, the manufacture of transport equipment, as well as the manufacture of computer, electronic, and optical products grew. At the same time, a fall was observed in the manufacture of electrical equipment, as well as in the manufacture of food products, beverages, and tobacco products.
Looking ahead, the outlook is quite mixed. On the one hand, there is a slight improvement in the European economy, which is positive. On the other hand, due to the global trade conflicts and the hectic nature of tariffs, a wait-and-see stance may remain dominant in the sector. In addition, a country-specific factor is the technological disadvantage that domestic battery production suffers from despite relatively favorable European electric car sales. Additionally, the most recent news that the Chinese CATL is to postpone the construction of the second phase of the Debrecen plant is not favorable either. A positive growth impact from earlier capacity expansions should be expected from 2026. However, the above factors have increased uncertainties in this aspect as well. Industrys contribution to GDP might have remained negative in the second quarter, and this would hardly improve in the remainder of the year.