Published on: 14 May 2018

Industrial production decreased by 2.4%

In March 2018, the volume of industrial output declined by 2.4% compared to last year’s high base. Based on working-day adjusted data, the production grew by 1.9%. Compared to raw data, the significant difference is due to the fact that there were two fewer working days in March 2018 than in March 2017.

In March 2018:

The volume of industrial production decreased by 2.4% year-on-year. (Compared to the March data published in the first estimate, there is no change in the data of the second estimate.)

Industrial output – according to the seasonally and working-day adjusted index – was below the previous month’s level by 0.7%.

The volume of industrial export declined by 4.1% year on year. Within export sales in manufacturing, the export of transport equipment representing 36% dropped by 4.0%. In the manufacture of computer, electronic and optical products – the other significant subsection accounting for 15% of manufacturing exports –, export sales volume decreased by 2.6%.

Industrial domestic sales grew by 8.0%, within this, the domestic sales of manufacturing were 3.1% higher compared to the same month of the previous year.

Within industry, production declined by 3.0% in manufacturing representing a decisive weight (95%) while it grew by 46% in the small weight representing mining and quarrying. The output of energy industry (electricity, gas, steam and air-conditioning supply) increased by 6.8%, mainly as a result of a much colder weather compared with the previous year (according to the Hungarian Meteorological Service the March 2018 average temperature was 5.5°C lower than the 2017 March average).

Changes in the production and sales of manufacturing

(%)

Period Production Total Domestic Export Share of export in sales at current prices
sales
Volume index, corresponding period of previous year = 100.0
2016101.4101.4101.8101.375.1
2017104.9104.4103.5104.774.6
2018January108.3108.7116.6106.375.1
February103.8103.8113.8100.874.8
March97.097.0103.195.074.3
From the beginning of the year102.7102.7110.5100.374.7

Production declined in nine of the thirteen subsections of manufacturing, to which the high base effect of the previous year contributed as well.

The production of transport equipment representing 29% of manufacturing output decreased year-on-year by 2.6%. The manufacture of parts and accessories for motor vehicles rose by 3.3%, whereas the manufacture of motor vehicles fell by 8.0%. The lower performance level of the subsection is also reflected in its orders indicators.

The manufacture of computer, electronic and optical products accounting for 12% of manufacturing decreased by 4.0%. Out of the two dominant groups the manufacture of communication equipment went up by 24%, while the manufacture of consumer electronics dropped by 14.1%.

The manufacture of food products, beverages and tobacco products giving 10% of manufacturing declined by 2.4% compared to the previous year’s same month. Out of the groups the largest one: processing and preserving meat and the production of meat products (representing 27% of the subsection) rose by 6.8%, while the manufacture of tobacco products having the smallest weight grew the most by 12.9%. Out of the subsections showing decreases the manufacture of grain mill products, starches and starch products dropped at the highest rate of 18.1%.

A slowdown in the rate of growth - compared to the previous months - can be observed in the medium weight representing subsections: the manufacture of rubber and plastics products, and other non-metallic mineral products rose by 4.2%, while the manufacture of basic metals and fabricated metal products increased by 1.0% year on year.

The manufacture of chemicals and chemical products exceeded its high base level, output was 5.6% higher year-on-year in March, first of all owing to the manufacture of plastics in primary forms giving almost a two third weight.

Contrary to the increase in the previous month manufacture of pharmaceuticals, medicinal chemical and botanical product representing little weight dropped by 10.9%, mainly as a result of an unfavourable tendency in export sales.

The manufacture of textiles, wearing apparel, leather and related products having the smallest weight also fell remarkably by 13.3%, both domestic and export sales decreased.

The manufacture of machinery and equipment n.e.c accounting for 6.4% of the manufacturing output dropped at the highest rate of 16.3%, mainly due to a significant fall in the manufacture of engines and turbines, except aircraft, vehicle and cycle engines representing almost a one fourth weight.

Changes in production in the major subsections of manufacturing, March 2018

(%)

Subsections Volume indices of production, corresponding period of previous year = 100.0 Share of subsection within manufacturing at current prices
code denomination
CAManufacture of food products, beverages and tobacco products97.610.0
CGManufacture of rubber and plastics products, and other non-metallic mineral products104.28.5
CHManufacture of basic metals and fabricated metal products, except machinery and equipment101.08.6
CIManufacture of computer, electronic and optical products96.011.9
CKManufacture of machinery and equipment n.e.c.83.76.4
CLManufacture of transport equipment97.429.4

By a 3.8% increase in the number of employees, the labour productivity of industrial enterprises with 5 or more employees was 6.0% lower in March than in the same month of the previous year.

Out of the territorial units of Hungary, industrial output grew year-on-year only in two: in Budapest and Pest region (by 0.8 and 3.6%). In the other regions, volume decreases between 0.1% and 6.0% were recorded, the lowest value being observed in Western Transdanubia.

Total new orders volume in the observed subsections of manufacturing declined by 5.0% compared to the same month of 2017. New domestic orders volume rose by 7.4%, while new export orders dropped by 6.8%. The volume of total stock of orders was below the level of March 2017 by 6.7%.

In January–March 2018, compared to the same period of the previous year:

Industrial production went up by 2.5%. The volume of export sales representing 63% of all sales declined by 0.2%, while that of domestic sales accounting for 37% of all sales rose by 5.9%.

The labour productivity of industrial enterprises with 5 or more employees went down by 1.3% along with a 3.7% increase in the number of employees.

Out of all regions industrial production declined year-on-year only in Western Transdanubia (by 0.9%). The largest volume growth (7.5%), was measured in Southern Transdanubia and Pest region, in the others volume increases between 0.6% and 3.8% were recorded.