Industrial output in May: from decrease to stagnation

HUNGARY - In Brief 06 Jul 2025 by Istvan Racz

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The preliminary industrial output numbers for May were not particularly strong, to say the least: -1.3% mom, -2.6% yoy. Yet, it is notable that this came after a much stronger result in April, when output actually grew by +1.5% mom, so that in the last two months together, output did not fall any further. KSH said, in its usually tight-lipped style of their preliminary monthly reports, that on year-on-year basis, gross output grew in car manufacturing and in computers, electronics and optical products, whereas it shrank in electric equipment (including batteries for EVs) and the food industry. Looking at the fixed-based chart (volume terms, sda, Dec 2010 = 100; source: KSH), the latest numbers on industrial output still seem to be largely within the decreasing trend range that has been there since late 2023. However, it also needs to be pointed out that output more like stagnated in the first five months of 2025, ending up only 0.2% lower in May than the December 2024 production level. Output still dropped by 2.5% yoy in April and May together, which is much less of a negative contribution to total GDP growth than the -5.9% yoy result in Q1. On this basis, one could actually expect Q2 GDP growth at marginally positive levels, and yes, we do so, even though agriculture was a potential significantly negative contributor in that period. Back to industry, it may be worth taking a quick look at Euro Area and Hungary output data together (volume terms, sda, Dec 2015 = 100; sources: Eurostat, KSH): The point here is that there has been obvious stabilisation and even some recovery seen in Euro Area industry, with which Hungary's local industrial sector is heavily integrated. T...