Industrial slump in Europe is taking its toll: an awful output number is reported for November

HUNGARY - In Brief 09 Jan 2024 by Istvan Racz

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KSH says that industrial output fell 2.3% mom, 5.4% yoy in November. The latter follows -3.1% yoy in October and -5% yoy in Q3. The cumulative 11-month output growth was -4.8% yoy. Details are not available yet, but KSH briefly said that in November, only oil refining and chemical products grew, the rest of the sector, including the normally expanding car manufacturing and battery production, shrank. This seems quite bad in itself, but the worst part of the story is that domestic industrial output has been decreasing pretty much systematically since its peak recorded in September 2022. The cumulative decrease since then had been 8.8% until November 2023: The chart above shows that Hungary has been actually following the decline of industrial production of the Euro Area, with which it is highly integrated. The November data for Eurozone industry is not available yet, but output growth in the last twelve months to October was a negative 6.6%. Manufacturing PMI for the Euro Area stood at a dismal 44.4 in December. As for the manufacturing PMI for Hungary, we do not even report the figures here: they keep indicating healthy expansion, whereas actual output data is signalling a disastrous performance. So sadly, it appears that Hungary's PMI cannot be looked at as a reliable leading indicator.