November industry and retail sales data reflects only moderate 2nd wave lockdown impact

HUNGARY - In Brief 08 Jan 2021 by Istvan Racz

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StatOffice (KSH) statements on industrial output this morning and on retail sales yesterday, both on November data, have justified analyst beliefs, including ours of course, that the initial negative impact of the 2nd wave Covid lockdown would be significantly smaller than the impact of the 1st wave lockdown was in spring 2020.Industrial output fell by a monthly 1.2% in November, as opposed to a much bigger, 10.6% contraction in March. On yoy basis, output was still up by 1.9%, but the growth rate moderated from 2.7% yoy in October. In previous months, output was impressively recovering from the spring debacle.Retail sales, in turn, grew further by 1.1% mom in November, exactly at the same rate as in the previous two months. Their yoy growth rate even accelerated moderately, to 0.6% from October's 0.1%. The yoy growth rate of retail sales has been continuously recovering since the spring lockdown, but from a deeply negative territory (-8%) recorded in April.As a reminder, the spring lockdown was introduced in Hungary on March 28, and the 2nd wave lockdown started on November 11. However, the domestic economy was affected by previously introduced Covid restrictions and the impact of tighter restrictions all around the rest of the world in both cases.As we have said earlier, the 2nd wave lockdown has been structured in a way that it hampers economic activity less than 1st wave restrictions, and also the general public, including employers, consumers, service providers, etc. have learned a lot in the meantime on how to live together with, and maintain activities under, Covid conditions.