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Facts & Statistics

Industrial performance for November 2021 exceeded expectations

Analysts comment on the preliminary data out of the Hungarian Central Statistical Office (KSH).

According to MTI,  the first estimate published by the Hungarian Central Statistical Office (KSH) showed that the volume of industrial production in November 2021 was 2.6 percent higher than a year earlier after two months of decline, while seasonally and working-day adjusted industrial output rose by 2.9 percent compared to the previous month.

Despite the weakness in the two largest sectors, industrial performance for November 2021 exceeded expectations, improving the prospects for GDP growth in the fourth quarter. 

Gergely Suppan, a senior analyst at Takarékbank, said the annual increase in industrial production in November exceeded expectations. The rise from the previous month can be explained by the easing of the chip shortage and the start of production of a new car model, which will hopefully bring some improvement in vehicle production. He added that the good performance of other sectors partly offset continuing problems in the vehicle manufacturing sector. Without the shortage of semiconductors and other components, industrial output could be as much as 9 to 12 percent higher than current levels. Due to base effects and the commissioning of new capacities, Suppan expects industrial growth of 10 percent this year and 5–6 percent next year.

Péter Virovácz, senior analyst at ING Bank, saw November’s industrial production data as a clear positive. He reckons that industry has made up for the summer slump and that production levels are roughly back to the levels seen in the spring. The ING Bank expert believes that the other manufacturing sectors have together been able to compensate for the weakness in the two largest sectors, perhaps foreshadowing that Hungarian industry as a whole is capable of positive performance even without the automotive and electronics industries.

Gábor Regős, head of the macroeconomic division of Századvég Gazdaságkutató, said that KSH recorded outstanding growth in the food industry, while the performance of the automotive industry remained negative due to the chip shortage, which seems to be taking a long time to resolve. Regős also pointed out that the contribution of industry to economic performance in the fourth quarter was neutral or slightly negative overall. In 2022, industry could make a positive contribution to economic output, especially if shortages of raw materials and transport sector difficulties ease, he added. 

János Nagy, a macroeconomic analyst at Erste Bank, said a surprise could be driven by new capacity, including in the heavyweight food sector, which has offset the weakness in the automotive sector. 

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