EEC ECONOMY Czech and Hungarian industrial production stronger than expected in November


January 7 (Reuters) – Industrial production in the Czech Republic and Hungary rose more than expected in November, showing a recovery even as problems in the auto sector continue to worsen.

The data was more evidence that the economies of Central Europe likely ended 2021 stronger than previously thought, as the industry resists supply chain crises and rising input costs.

Czech industry recorded its second strongest month this year, posting a 1.6% year-on-year production increase in November, while increasing 4.9% on the month, boosted by machinery manufacturing .

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Big numbers in Hungary showed a 2.6% increase in production and a 2.9% monthly gain.

Both economies are heavily dependent on auto production, which continued to decline in November amid a global chip shortage that slowed production by automakers.

“It’s a big positive surprise,” said Peter Virovacz of ING Budapest.

“Until now, we have seen that industries with less weight could not balance the effects of shortages on the most important sectors of automotive and electronics, and their problems resulted in lower production. industrial as a whole. “

In the Czech Republic, with auto production down 7% in November, data suggests the industry could boost economic growth at the end of the year, which relied heavily on domestic demand after the blockages ended last spring.

The statistics bureau said new orders were up 9.3% year-over-year, driven by foreign demand.

“The industry’s problems with parts shortages or in supply chains are not over, but leading indicators in December already indicated that the situation has gradually improved,” said Jakub Seidler, chief economist. of the Czech Banking Association.

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Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Toby Chopra

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