Hungary: Industrial activity contracts at sharpest pace on record in April
June 5, 2020
Industrial production nosedived 36.6% year-on-year in April (March: -10.0% yoy) according to a first estimate by the Statistical Institute. April's reading marked the worst reading on record and reflected the significant impact of the coronavirus pandemic on industrial activity.
On a monthly basis, factory output dropped 30.5% in seasonally-adjusted terms in April, which was well below March’s 10.4% fall. The reading marked the worst result on record. Meanwhile, the trend pointed down, with the annual average variation of industrial production coming in at minus 0.2%, contrasting March's plus 3.3% reading.
Commenting on the reading, Peter Virovacz, senior economist at ING Hungary, noted:
“Even though several industrial companies restarted production in some way from the second half of April, it was clearly not enough to counterbalance the total standstill in the first part of the month. Despite news that companies had shifted to produce masks and other health products, it was not enough. […] The only silver lining is that after a catastrophic April, May could bring some relief. As production restarted in car manufacturing and related suppliers, there are hopes that we could see a mild rebound. But there are clearly constraints in global and local demand, the level of orders has collapsed and companies are using just one shift to produce instead of the previous three-shift working order, suggesting that the recovery will be lengthy.”
Author: Hanna Andersson, Economist