First industry output decreasing since 1992

In 2008, the volume of industrial production declined by 1.1% compared to 2007. In December 2008, industrial gross output decreased by 19.6% compared to December 2007, the index adjusted for working days fell by 23.3%.

The volume of industrial production in December –
according to

seasonally and working-day adjusted indices – was
below the level of the previous month by 15.1%.

In the course of 2008, industrial gross output decreased
gradually and at an ever increasing rate from June (except July and September), while a growth of 8.2% was observed in the
previous year. According to data of enterprises by size groups of employees the
greatest decrease was observed among export oriented large enterprises
concerning the whole of 2008 and December.

In December 2008, out of sections of the industry, the
production of manufacturing fell markedly, by 23.3% compared to the same month
of 2007. Manufacture of food, beverages
and tobacco, accounting for a similar proportion, decreased by 8.9%.

Against an increase of 8.8% in 2007, the volume of manufacturing
output, concerning the whole year, decreased by 1.8% on the previous year,
which came from an output increase of 5.8% in the first halfyear, and from a
decrease of 8.9% in the second one. In 2008, growth was recorded in the half of
subsections.

In 2008 industrial export sales decreased by 0.8%, in
December, as a result of a strong fall in export demand, by 22% compared to the
same period of the previous year. The growth rate of export sales lessened
quarter by quarter, and it decreased for the first time in August (by 7.9%)
compared to the same

month of the previous year. In 2008, exports accounted for
52% of total industrial sales and 66% of manufacturing sales. In 2008
manufacturing exports decreased by 0.6%, in December by 22.9% compared with a
year earlier.

In 2008 industrial
domestic sales declined by 2%, in December by 11% compared to the same period of
the previous year. In 2007, a volume increase of 2.6% was still recorded. The domestic
sales of manufacturing decreased by 3.4% regarding the whole year and by 9.7%
in December, primarily due to a fall in orders concerning the supplier networks
of export oriented enterprises. Similarly to last year, in 2008, a fall was
observed (9.3%) in the domestic sales of manufacture of food, beverages and
tobacco, which accounts for nearly one fourth of domestic manufacturing sales,
but the December decrease (4.6%) did not reach the yearly average. In manufacture
of coke, refined petroleum products, representing one sixth of domestic
manufacturing sales, domestic sales rose by 4.4% in 2008, while there was a
volume increase of 1.1% in December.

A significant
narrowing in international and domestic demand is backed up by the fact that in
December 2008 total new orders in the observed branches of manufacturing
dropped by 37.2%

compared to the same
month of 2007. In volume terms, new export orders decreased by 37.9%, while new
domestic orders by 33.2%. In volume terms, the total stock of orders was 16.1%
lower than in December 2008.

In 2008, labour
productivity in industrial enterprises with 5 or more employees was 1.5% lower
than in 2007, along with an increase of 0.2% in the number of employees. In
manufacturing, labour productivity decreased by 2.4%, at a higher rate than the
industrial average.

In 2008, in
comparison with the previous year, out of regions of Hungary, industrial
production increased only in Southern Transdanubia (0.8%). In other regions
volume decreases of 0.2- 6.4% were recorded. In December, falls were observed
in every region.