Hungary: Industrial sector runs out of steam
October 14, 2011
In August, industrial production contracted a working-day adjusted 0.4% over the same month last year, which contrasted both the 2.7% increase recorded in July and market expectations, which had industrial production expanding 1.3%. The decline reflects a contraction in the manufacturing sector, which offset improvements in mining and quarrying as well as in electricity, gas, steam and air conditioning supply. Although industrial exports continue to be the key driver, they appear to be running out of steam. In August, industrial exports grew a working-day adjusted 3.5%, which came in below the 5.3% observed in July. Meanwhile, domestic sales contracted for the eleventh month in a row, dropping 8.0% (July: -7.3% year-on-year). A month-on-month comparison corroborates the deterioration suggested by the annual figures, as industrial output declined a seasonally and working-day adjusted 1.3% over the previous month, which contrasted the 0.8% expansion recorded in July. The trend continues to point downwards, with annual average growth in industrial output falling from 8.7% in July to 7.3 % in August.