Output of Hungary's industrial sector posted a 15.6% m/m rebound in May after a historic collapse in the previous month, as easing of restrictions were gradually lifted, but annualised figures show a massive 30.7% y/y decline, according to the latest data from the statistics office KSH on July 7.
Adjusted for workday effects, industrial output plunged 27.6%, slowing from a 36.6% drop in the previous month. The first month of the lockdown sent the industry down 10% in March.
Production volume decreased in every manufacturing subsection during May even as factories were slowly reopening from a two-month lockdown that started in mid-March.
Detailed data will be released later, but KSH said preliminary data suggests that the drop in vehicle manufacturing, which carries the largest weight, was "extreme". Vehicle makers gradually restarted production in May. Audi only returned to three-shift production in the middle of the month, while Suzuki did that at the end of June.
The output of computer, electronics, and optical equipment as well as food, drink and tobacco products fell "to a lesser degree", it added.
Industrial output dropped 13.8% y/y in the first five months.
Analysts agreed that Hungary's economy is set for a slow and gradual recovery as uncertainties abound as to how global demand will evolve.
Even with the rebound in May, Hungary's industrial production is at the level last seen in 2013 and it is 15% below 2015 figures.
ING Bank sees a rebound in the summer months due to the fulfillment of backlog orders, but decreasing global demand and labour market problems will slow the pace of recovery.
Analysts forecast Hungary's industry to contract in a range of between 7% and 10% in 2020.