Hungary: Industrial production loses steam
May 13, 2011
In March, industrial production rose a working day adjusted 9.2% over the same month last year. The figure came in well below both the 14.6% expansion observed in February (previously reported: +14.3% year-on-year) and market expectations, which had production increasing a more robust 12.0%. All sectors decelerated over the previous month, the most important being manufacturing, which slowed from a 15.8% increase in February to a 10.0% expansion in March. Growth in mining and quarrying fell sharply as well, dropping from 41.9% in February to 13.5%. Meanwhile, in line with the developments observed throughout last year, exports continued to drive the industrial recovery. In March, industrial exports expanded a working day adjusted 14.5% which, nevertheless, represented a moderation over the 18.5% increase tallied in February. In contrast, production for domestic use remained in negative territory for the sixth consecutive month contracting 2.9%. A month-on-month comparison points to a decline in March, as industrial production dropped 3.6% in seasonally adjusted terms over the previous month. In its latest inflation report from March, the Central Bank revised this year's growth prospects down a notch to 2.9%, while maintaining expectations that the economy will increase 3.0% next year.