June industrial output data worse than expected - analysts

Analysis

Fresh industrial output data for June was worse than expected, analysts said on Friday.

Hungary's year-on-year industrial output climbed a workday-adjusted 1% in June, slowing from a 2.3% rise in May, the Central Statistics Office (KSH) said in a first reading on Friday. Unadjusted output fell 1.4% in June, compared to a 7.3% increase in May.

Erste Bank's Zoltán Árokszállási said the data were a negative surprise, adding he had expected an adjusted increase of 5.9%, in line with the market consensus. The data was unexpected because Hungary's purchasing managers’ index has been over 50 for months, which signals expansion, he explained.

Árokszállási said he would probably have to lower his earlier projection for full-year industrial output growth of 8.5%.

Dávid Németh of ING Bank said the data show exports cannot counter weak domestic demand to the same degree as six months or a year ago. He projected year-on-year growth of 5% or lower in the coming months and bumped down his forecast for the full-year increase from 8% to 7%.

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