Flagging sentiment in manufacturing industry

Based on our survey current situation of the Hungarian manufacturing industry is stable and moderate optimism can be observed among companies compared to 2014. Business barometer is in positive region in case of both exporters and non-exporters although the latter has lower values. Capacity utilization is above 70%, sales is slowly increasing, thus manufacturing companies are in good mood which is also indicated in their business barometer which reached 66 points. At the same time the lack of labour force and financial difficulties are growing problems.

This can be one of the reasons why sentiment indicator is flagging further. The level of inventories are high, production forecasts are moderating and the stock of orders are getting lower in case of non-exporters. Therefore the sentiment indicator of non-exporters are below 50 points (48,6), while exporters have 56 points. Thus, the aggregated sentiment indicator is at 53 points which is above stagnation (50 points) and it draws the attention to fading dynamics in manufacturing.