Output of Hungary’s industrial sector fell by an annual 8.1 percent in July, declining by a lower rate, 28.8 percentage points, than the April low because of a pandemic lockdown, the first reading of data released by the Central Statistical Office (KSH) on Friday show.
Adjusted for workday effects, industrial output dropped by 7.7 percent in July.
In a month-on-month comparison, industrial output rose by a seasonally- and workday-adjusted 7.2 percent.
For the period January-July, industrial output dropped by an annual 12.1 percent.
Analysts: industrial production gradually recovering from April low point
ING Bank senior analyst Péter Virovácz said economic performance is continuing to improve and the industrial sector still has significant potential in it. Production volume is down at a level similar to that of the second half of 2017, he noted.
The usual once-a-year summer shutdowns took place in some factories in July, which could explain why KSH is still reporting an output drop in the vehicle manufacturing segment, he added. In August, production could fall further on continuing temporary stops at factories.
K+H Bank senior analyst Dávid Németh said industrial production is gradually recovering from a low point in April when lockdown measures halted most production. The pandemic is still making things uncertain and it is not clear what effect it will have on exports and how domestic consumption could step in to support lower foreign demand. Industrial output for the year could even be down by a single digit number but growth could start again next year, he said.
Takarékbank chief analyst Gergely Suppan said industrial production could this year fall by around 7 percent but in 2021, because of the low base affect, it could rise by 13-14 percent. For April 2021 he forecast a growth rate as high as 60 percent as production plummeted this year in April.
Featured photo illustration by Tibor Rosta/MTI