In May 2016, the volume of industrial output was up by 9.2 percent in comparison to the corresponding period of the previous year, and in the initial five months of the year output increased by 3 percent.

The growth momentum driving the sector since January 2010 has been maintained: output has grown by 32 percent since the change of government. The expansion of the industrial sector is attributable -- besides the performance of the motor vehicle manufacturing sector – to output growth in the metal and rubber product manufacturing sectors. The 5.7 percent year-on-year growth in the volume of new orders signals further expansion.

Unadjusted data of May 2016 show industrial output growth of 9.2 percent, year-on-year, while the workday-adjusted indicator shows growth of 4.2 percent.

Output at the manufacturing sector, a major industrial branch, was up by 9.7 percent. The fact that output increases ranged between 6.2 percent and 17.2 percent in twelve out of the altogether thirteen branches indicates balanced growth. Output at one of the largest sub sectors which accounts for some one-third of total manufacturing sector output, motor vehicle manufacturing, was 6.9 percent higher compared to May 2015. Output at two other key sectors, the manufacturing of road vehicles and road vehicle components was up by 1 percent and 14.4 percent, respectively, in the observed period. Data showed double-digit year-on-year growth of output (10.8 percent) in the rubber products manufacturing sector, a key supplier of the car industry.

The second largest manufacturing sub sector, the manufacturing of electrical products, posted output growth of 17.2 percent. Within this sub sector, all divisions saw expansion: for example, output at producers of consumer electronics and communication equipment rose by 17.4 percent and 25.7 percent, respectively.

Output in the third largest sub sector, the manufacturing of food, beverages and tobacco products, increased by 6.3 percent year-on-year -- thanks to higher sales volumes on both the domestic and foreign markets.

In accordance with the new industrial policy blueprint, the Irinyi Plan, the Government is aiming to give additional impetus to industrial expansion, building on knowledge and innovation.

The Irinyi Plan focuses on promoting the domestic industrial sector, boosting innovation and job creation, underpinning efforts to improve the competitiveness and export potential of domestic enterprises and thus on increasing the stamina of the economy.

To this end, domestic as well as EU funds will be made available. Of the latter, the Government is to disburse 60 percent of the altogether HUF 12 000bn, available until 2020, on developing the Hungarian economy. These funds will be made available through calls for tenders published until 2017.

(Ministry for National Economy)