The manufacturing intensity of Central Europe reaches Hungary. | So Good News
Oct 3 (Reuters) – Hungary’s manufacturing activity fell for the first time in 17 months in September, a survey showed on Monday, while inflation and higher energy costs in the Czech Republic and Poland dampened the impact in central Europe.
Hungary joined its central European peers in signaling a decline in manufacturing as Europe’s energy crisis and decades of high inflation hit consumers and businesses.
The country’s seasonally adjusted purchasing managers’ index (HUPMI=ECI) fell sharply to 49.6 in September, falling below the 50 level that separates it from contraction, Hungary Logistics, Procurement and Inventory Management Board (MLBKT) said.
On a different methodology, the Polish S&P Global Polish Manufacturing PMI (PLPMI=ECI) slowed its rate of contraction, rising to 43.0 in September, but remained in contractionary territory for five months.
The Czech S&P Global PMI (CZPMI=ECI) was at its lowest since May 2020 at 44.7.
Surveys point to a rapid descent for central Europe’s economy, with risks of a recession growing.
“Slow growth or a decline in manufacturing is a trend seen in most European economies,” said Radomir Jac, economist at Generali Investments CEE.
“The deterioration in manufacturing is consistent with expectations that the Czech economy will cool in the second half of the year and move past a technical recession.”
Central banks in the region are also trying to end last year’s cycle of sharp interest rate hikes, as economies are hurt, while price pressures remain in the bubble. After Hungary handed out rates from the Czech Republic last week, eyes turned to Poland this week.
In Hungary, where the forint is at a record low, manufacturing fell below 50 points in the PMI survey.
Ahead of September, Hungary’s PMI was supported by bright spots, pointing to continued growth. for example, Car production is booming around the region as supply chains are streamlined and automakers work through deep backlogs.
“August industrial production data (this week) … could show a recovery as carmakers including Audi and Mercedes reported no problems,” said Gergely Suppan of Hungarian Bankholding. The September data could also be surprising. upside down
Output contracted in Poland and the Czech Republic, and new orders fell again.
Surveys in Poland and the Czech Republic showed import price inflation to be driven by rising energy costs. European Union leaders are trying to control rising prices as Russia invades Ukraine and cuts Russian gas supplies to the bloc. read more
A sharp jump in inflation, which reached more than 17 percent in Poland in September, is putting more pressure on consumers’ wallets.
“Businesses see weak consumer consumption,” said Sebastian Sajnog, an analyst at the Polish Institute of Economics. “Increasing costs remain a significant issue hampering the (manufacturing) sector.”
Reporting by Jason Hovet in Prague; Krisztina Than and Gergely Szakacs in Budapest and Alan Charlish and Anna Wlodarczak-Semczuk in Warsaw; Edited by Ed Osmond
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