Hungary’s vehicle manufacturing output, the engine of industrial growth, fell 33.7% year-on-year in August as the global semiconductor shortage hit factories, the Bureau of Statistics (KSH) said in ‘a second reading in October. KSH confirmed that aggregate industrial production increased 2.6% and 0.6% after adjusting for the number of working days. On a monthly basis, production fell 2.7% on a seasonally and working day adjusted basis.
The fall in the output of companies in the auto industry, which accounted for 17% of total manufacturing output in August, accelerated after falling 6.7% in July. The global shortage of chips forced the Daimler plant in Kecskemet to cut production in August.
After a dynamic recovery following the reopening, industrial production appears to have hit a wall, ING analyst Peter Virovacz said in a note after the preliminary data.
The combination of transportation problems, supply chain difficulties and labor shortages is now an effective constraint on accelerating production, he added.
Production in the computer, electronic and optical equipment segment, which accounts for 12% of the manufacturing sector, fell 3.7% year-on-year in August.
Industrial sales increased 5.8% year-on-year, with domestic sales rising 15.8% and export sales 0.2%.
The stock of orders in the segments of the manufacturing sector tracked by KSH increased 10.8% year-on-year at the end of August and the volume of new orders decreased by 12.5% as domestic new orders increased by 6. 5%, but new export orders fell 15.7%.
The outlook for the sector is clouded by soaring energy and commodity prices which are eroding the profitability of the sector. Hungarian companies are facing rising labor costs, analysts noted.
Industrial production could be further affected by plant closures in September, Erste Bank noted, adding that fourth-quarter GDP growth could be subdued as the external environment becomes less favorable.