Central European Daily

The first interesting regional macro report has come from Hungary this morning The industrial output rose by 6% YoY (both unadjusted and working-day adjusted figure) in October, which is the highest read since 2011. Although the figure is quite impressive, the base effect plays a very important role in the acceleration of the production. Last year the European economic outlook deteriorated substantially in the last quarter, and the companies started to moderate their production as a response on the worsening outlook. Although this figure only a preliminary one so we cannot see the details behind the increase, based on the last months developments we think that still the export linked companies (especially car manufacturer ones) may drive the production acceleration, but production on the domestic market may play also a more important role as there are many orders from the public sector. Unfortunately seasonally and working day adjusted figure reflects 0.5% MoM decrease. It is only the second time (first was in May) in this year, when production could not increase compared to the previous month, which makes the recovery a little bit gloomy, but in September reached the highest MoM (1.8%) growth in 2013.