Country Report Hungary
- ID: 2101527
- May 2016
- Region: Hungary
- 27 Pages
- The Economist Intelligence Unit
In March industrial output contracted by 2.4% year on year as car production declined from a high base. Output barely increased in the first quarter overall, and order data point to only modest growth in the coming months.
The 2.4% year-on-year decline in output in March (working-day adjusted) is the first drop reported by the Central Statistical Office (KSH) since May 2013, and was driven equally by lower domestic and external demand. In the first quarter of 2016 industrial output increased by just 0.3% year on year (unadjusted), a sharp slowdown from full-year growth of more than 7% in both 2014 and 2015.
Vehicle production, the largest segment of industry, was down by 6.7% year on year in March, the biggest drop in seven years. In the first quarter of 2016 output of vehicles was down by 1.6% year on year. The decline can be attributed in part to a high base, as one of Hungary's biggest car plants launched a new model in early 2015, with output in March of that year soaring by 18.9% year on year. With no new production capacities currently under construction, it is likely that growth in vehicle manufacturing will stagnate in 2016, following double-digit growth in 2013-15.