Automotive sector

bne IntelliNews – Hungarian industry outperforms despite capacity shortage in automotive sector

Output in Hungary’s industrial sector rose 5.8% year-on-year in December, the fastest rate since the summer, according to data released by the Central Statistics Office (KSH) on February 4. Adjusted for the number of working days, production increased by 3.6% and 0.1% compared to the previous month. For the year as a whole, production rose 9.6%, but from a low level.

KSH said production in all manufacturing branches increased in December, except for the automotive sector – the heaviest segment – ​​which continued to be affected by capacity restrictions caused by the global shortage of semi- drivers.

This still weighs on Hungary’s leading economic sector, but the good performance of other segments has offset this, analysts said.

Industrial production rose 1.5% q/q in the fourth quarter, giving a positive boost to quarterly GDP. The first reading of fourth quarter GDP data will be released on February 15.

The shortage of semiconductors could remain a problem for some time and production could “gradually improve”, leading to a “marked rebound” in the second half, according to Takarekbank analyst Gergely Suppan.

He estimated industrial production growth at 5.5% for 2022, supported by base effects and new capacity in industry.

ING Bank’s chief analyst Peter Virovacz said output was ‘virtually flat’ from November’s jump and suggested the drop in automotive segment output could have been even bigger than the declines previous.

Hungary’s industrial sector could post dynamic growth that is largely not driven by base effects if smaller branches continue their strong performance and supply chain issues ease from the second half of the year, said he added.

Hungarian industry showed broad-based growth in 2021, which could help lift GDP for the year as a whole to 6.8-6.9%, Finance Minister Mihaly Varga noted.