Manufacturing: mixed outlooks

Current sentiment of the Hungarian manufacturing industry is ambivalent. According to their own sentiment evaluation, firms are feeling themself well and their outlook for the next 6 months is also looking good. The evaluation of the country’s current state and prospectives just as the production forecasts are also good.

In spite of all these there are downward risks; stock of inventories are high while stock of orders are rather low, particularly in domestic relation – most firms said that the level of domestic stock of orders is at most moderate. Capacity utilisation is around 77% which is considered to be high. At the same time the ratio of those companies that are willing to increase the number of their employees is lower. The reason behind this is most probably the labour shortage experienced in the past quarters.

The labour shortage is also the most problematic factor in the companies’ life followed by the lack of demand which is traditionally one of hindering element. Financial difficulties are experienced by 1/4-1/5 of the companies “only” and this refers that the increase of minimum wage has not caused hardship yet.

Although the confidence indicator has improved a bit compared to the last quarter there are still negative risks concerning the outlook. Economic growth is 2017 will most probably be better than in the past years fueled by private consumption. At the same time this can not be observed in the sock of orders that suggests the concentration of investments to larger companies.