Plummeting January industrial output revealed by data published on Friday came as no surprise, considering recent factory shutdowns and layoffs, analysts told MTI.
Hungary’s industrial output fell 22.9% or a calendar-adjusted 21% in January from the same period a year earlier, although rose a seasonally and calendar-adjusted 2.5% from December, according to preliminary figures published by the Central Statistics Office (KSH) on Friday.
ING Bank’s Dávid Németh said factory shutdowns and mass layoffs could result in 20% drops in industrial output for several months, until companies’ stocks run out, but will pick up later. In light of the data, Q1 GDP is likely to fall more than 4%, he added.
Takarékbank’s Gergely Suppan said he had expected a 1-1.5 percentage point bigger twelve-month drop in January output, but he added that it was difficult to gauge the drop because of the number of companies that extended their holiday shutdowns or stopped production because of the gas crisis in January.
The 2.5% month-on-month increase is a good sign as it shows production returned to levels before the holidays, Suppan said. Had production returned to full capacity, however, it would have risen about 15%, he added.
Industrial output is likely to continue to fall around 20% in the coming months, he said. But a turnaround could come in the second half of the year, first of all as the automotive industry in the euro zone recovers. The question is to what degree this will affect Hungary.
In the Czech Republic, the Skoda factory moved back to a full work week already at the end of February, Suppan noted. Industrial output could start rising again as soon as December, though partly because of a low base, he said. (MTI-Econews)