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May industrial-output data better-than-expected

Macroeconomic analysts told MTI that Wednesday-morning data showing that Hungary's industrial output rose 13.7% in the twelve months to the end of May and 5.4% from April to May was better than they expected.

Gergely Suppán of Takarékbank commented that April new-orders data have already suggested that Hungary should continue to post strong industrial-output growth, however the drop of the country's manufacturing Purchasing Managers Index (PMI) to under 50 in May and June made analysts to lower their expectations.

Suppán added that exports continue to fuel Hungary's industrial-output growth, noting that data indicates that the economy will continue to improve in Germany, Hungary's most important export partner. The Takarékbank analyst predicted that industrial-output would continue to grow around 10% in yr/yr terms over the coming months, cautioning, however, that it its difficult to predict the possible consequences of economic austerity measures to be imposed in countries throughout Europe during the second half of the year.

Zoltán Török of Raiffeisen Bank remarked that he had predicted 12-month industrial-output growth of around 10% in May, noting that Hungary's May data represents a continuation of a trend that emerged during the last quarter of 2009.

Török commented that exports, particularly automobile-industry and electronic exports, have continued to underpin Hungary's industrial-output growth, noting that industrial-output has also increased in other central and eastern European countries such as Slovakia, the Czech Republic and Romania. The Raiffeisen Bank analyst added that economic growth is likely to subside in Hungary's main export markets in western Europe during the second half of the year, thus industrial-output is growth will probably decline in H2.

MKB Bank sees Hungary's industrial production rising 7% in 2010 from last year's low base, but the growth rate will likely slow down to 3-4% in 2011. Industrial activity may run out of steam later this year as domestic consumption will remain depressed, short-term effects of the inventory cycle subside, and euro-zone growth will cool from 2H onward, as many European governments implement fiscal austerity measures, MKB said in a research note published on Wednesday, reminding that Hungary's output nearly solely hinges on exports. (MTI-ECONEWS)