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Hungary's PMI drops to 50.1 in August

Analysis

Hungary's seasonally adjusted Purchasing Managers Index (PMI) fell to 50.1 in August from 52.2 in July, the Hungarian association of logistics, purchasing and inventory HALPIM announced on Thursday.

The adjusted August PMI was the lowest since June 2010 and fell below the its July value which was the lowest value so far this year.

The index was below the long-term average August value of 52.3 and was at the average of the previous three years.

Hungary's PMI has reflected a slowdown of growth in the manufacturing sector in the past few months after a rapid increse between last November and April this year, the report noted.

A PMI of over 50 indicates expansion in the manufacturing sector compered to the preceding month, while a PMI of under 50 indicates contraction in the sector.

Two of the PMI's five sub-indices were above 50 last month : the production-volume and the employment sub-indices. The production index reflected growth in output volume now for 20th-consecutive month, for the longest period since a 24-month growth period between July 2005 and June 2007.

The employment sub-index indicated rising employment in the sector now for the 11th month in a row, although the rise considerably slowed from July.

The new order sub-index fell at a steeper pace and the August index value was below 50 only for the fourth time since 1995.

The purchased stocks sub-index did not fall further and its value is above the long-term average for the month. The index fell slightly in March, rose in April-June and fell in July.

The delivery time sub-index declined, indicating a further lengthening of delivery times. The sub-index has been below 50 for an unprecedented 21 months in August.

The HALPIM PMI index and sub-indices are based on monthly surveys of 100 supply managers at manufacturing companies in Hungary.

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