Industry further down, retail sales further up: nothing changed in January

HUNGARY - In Brief 06 Mar 2025 by Istvan Racz

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In January, industrial output grew by 0.8% mom, but it fell by 3.9% yoy, the latter after -7.8% yoy in December and -4.3% yoy in the whole of Q4 2024, all in seasonally and day-adjusted volume terms. The moderate uptick in January could be somewhat promising, even if not exactly the jump start of the year that was promised by PM Orbán. The problem is that the December figure was cut back to -2.9% mom from the previously reported -1.8% mom, and it was against that lower basis that the January number represented a single-month increase. In fact, the January result remained within the downwardly trend range, which had been there clearly for more than two years now. Here is the fixed-base chart (Dec 2010 = 100):Also in January, retail sales grew 2.2% mom, 4.1% yoy, the latter number returning to its previous trend of robust expansion, following an unexpected slowdown to 0.2% yoy in December, which pulled Q4 growth down to 2.7% yoy. Here is the fixed-base chart (once again Dec 2010 = 100):We would like to add here, that in value-added terms, industrial output fell by 2.6% yoy, whereas purchased consumption by households grew by 5.0% yoy in Q4, according to the recently published detailed Q4 GDP dataset. So it is really the industrial sector (primarily manufacturing, which fell by 4.5% yoy in Q4, as to its real value added), which can be blamed for the lack of growth in the domestic economy, rather than low consumer demand generated by households.In sum, the new monthly figures show the continuation of decreasing industrial output and expanding private consumption. One bad thing about this combination is that it is likely to lead to the deterioration of the otherwise conveni...