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Output of Hungary’s industrial sector rose by an annual 8.9 percent in January, the fastest rate since summer, the Central Statistical Office (KSH) said on Friday.
KSH said output of most branches of manufacturing increased in January. The automotive sector, the biggest segment of Hungary’s industry, grew again after declining for six months. Output of the computer, electronics and optical equipment segment “effectively stagnated” while that of the food, drink and tobacco segment, “grew above the average”, it added.
Adjusted for the number of workdays, output rose by 7.1 percent.
In a month-on-month comparison, output rose a seasonally- and workday-adjusted 1.9 percent.
ING Bank chief analyst Péter Virovácz said output growth in January was higher than expected mainly because of the performance of the automotive sector. At the same time, he said such growth rate is unsustainable amid rising parts shortages hitting European facilities with the closure of Ukrainian factories. Industrial performance this year is unpredictable, but it clearly faces another difficult year, he added.
Takarékbank chief analyst Gergely Suppan said disruptions to supply chains could continue to be a significant risk, as could a rise in the price of raw materials and energy, but the emergence of deferred demand, the need to replenish inventories and new production capacities, should bring a gradual recovery during the year with temporary fluctuations.
Pro-Fidesz Századvég’s chief analyst Gábor Regős attributed the high output growth in January to low base effects, good performance in the automotive sector, an improving global chip shortage and shorter seasonal shutdowns. Downside risks for the future include the Russia-Ukraine war, logistical problems and supply chain disruptions.
featured image illustration via Szilárd Koszticsák/MTI