Page 31 - CE Outlook Regions 2024
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2.3.4 Industrial production
Hungary’s industry is on track to contract 5-6% in 2023 after a 6.1% growth in the previous year. The energy crisis has stalled the post-pandemic rebound, and industrial players serving the local market have struggled to cope with the high interest rate environment and high energy prices. Large multinationals, accounting for the bulk of exports and operating at a significantly higher efficiency, were unphased by the crisis and continued to grow.
The slowdown of economic activity in the Eurozone poses real risks for Hungary, which does 75-80% of its trade with the EU. The total stock of orders was 5% below last year’s level. In the longer run, new capacities in the vehicle sector, namely battery production, could have a visible impact on Hungarian industrial output.
The locally compiled PMI index is characterised by great volatility, which makes it a less reliable guide to the eventual output of the manufacturing sector. The index hovered between 44.2 points and 61.9 points. Data is distorted by the over-representation of export-oriented companies.
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