Industrial output drops slightly in December

Automotive

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In December 2017, the volume of industrial output declined by 0.5% year-on-year, shows a first estimate of monthly data from the Central Statistical Office (KSH).  In 2017 as a whole, the volume of production increased by 4.8% year-on-year.

Based on working day-adjusted data, production in December grew by 4.5%.  The significant difference compared to raw data is due to the fact that there were two fewer working days in December 2017 than in December 2016, the KSH noted.

The volume of industrial output in December – according to seasonally and working day-adjusted indices – was 1.2% above the level of the previous month.

In 2017 as a whole, the volume of production increased by 4.8% year-on-year.

Cited by online economic news portal vg.hu, Dávid Németh, lead analyst at K&H Bank, noted that the annual growth in output far outstripped the full-year figure of 0.9% in 2016, attributing the growth principally to vehicle manufacturing and its increasing weight within the industrial sector.

According to Németh, current prospects remain favorable for Hungarian industry, partly due to the global boom, and partly because of several major ongoing investments in the vehicle and electronics industries, which will gradually make their effects felt over the next 1-2 years. He estimated similar industrial output growth of around 5% in 2018.

Gergely Suppan, chief economist at TakarékBank, said that production may pick up significantly in the early part of this year, foreshadowed by record industrial confidence and procurement managersʼ indices both at home, and in Germany and Europe as a whole, reflecting the accelerating rate of growth in the eurozone.

The gathering pace of industrial output in 2018 may also be supported by additional manufacturing capacities going on line during the year, particularly in the automotive sector (with new models entering production at Audi and Mercedes, for example), added Suppan.

The TakarékBank economist predicted that industrial production may increase by as much as 7.5% this year.

A second, more detailed estimate of industrial output data for December and the full year of 2017 will be published on February 13.

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