New data for December: poor industrial output, overcompensated by near-excellent retail sales figures

HUNGARY - In Brief 06 Feb 2024 by Istvan Racz

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This morning, KSH has published mixed data for December. First the bad news: industrial output fell 0.3% mom, 8.9% yoy on seasonally and day-adjusted basis. The raw yoy figure was actually -13.7%, which seems disastrous, but there were two less working days in December 2023 than one year earlier. Anyway, the situation is progressively deteriorating (see chart below), and as some 60% of industrial output is exported, it is easy to blame the problem mainly on the weakness of external demand: Industrial output in volume terms Note: Fixed-base chart, sda basis, December 2010 = 100; Source: KSH This was a first release from KSH, when breakdown data is not presented. In a very brief comment, they said that there were only three sub-sectors in which output grew, including mainly oil refining and coke production. To us, this says that the car industry is not doing particularly well (otherwise they would have said so). The situation will likely not get any better in January, when the local Suzuki factory had to stop for a week, as car engines did not arrive from Japan in time, because of the military conflict at the Red Sea (related transports had to get around Africa). But now the good news: retail sales picked up by 1.4% mom, after growing by 1% mom in November. In yoy terms, this meant -0.3% in December, which looked much better than November's -5.7%. But the really telling thing is the promising uptick at the end of the fixed-base chart: Retail sales in volume terms Note: Fixed-base chart, sda basis, December 2010 = 100; Source: KSH This will certainly make the Economy Ministry happy, for the evident suggestion that the long-awaited positive turnaround in consumer demand is...