The earlier sharp drops in industrial output, sales, foreign trade and even employment slowed in November as the steep drops of 2008 autumn entered the base. Several important indicators, however, still showed a negative or even less favourable picture than before. Examples include unemployment, construction output, retail trade and catering, or inflation which accelerated in November.

    After dropping to below four-year earlier levels in Q4 2008, Hungary's industrial output stagnated at this low level in H1 2009 before some improvements in the second half of the year. The twelve-month drop of industrial output slowed to 7pc or a working-day adjusted 9.2pc yr/yr in November as last autumn's output started in earnest, reached double-digit figures, just in November 2008. The seasonally and working-day adjusted month-on-month fall also slowed, however, to 1.3pc from 1.3pc in October.

    In November, several manufacturing sector branches actually registered a yr/yr increase, including vehicle production (2.3pc), chemicals industry (5.7pc ) and pharmaceuticals (1.5pc.) Food industry output was practically unchanged from November 2008 when it had suffered a 14pc fall, and the sector's November export sales rose 10.6pc yr/yr although domestic sales still fell 1.5pc in the period.

    The fall of industrial sales also slowed, again to a large part on a base-effect, as domestic sales fell 8.5pc and export sales fell 4.7pc from November 2008. January-November domestic sales fell 12.6pc and export sales fell 20.5pc yr/yr.

    November industrial sales prices were up 0.3pc yr/yr, as domestic sales prices fell 0.9pc, still suggesting weak demand. Export prices rose 1.2pc in forint terms.

    Of the indicators forecasting future prospects, new industrial orders arriving in November 2009 were down only by a moderate 0.9pc from a year earlier, with new export orders down 0.6pc and new domestic orders down 2.4pc yr/yr. Total order stock was still down 13.5pc from November 2008.

    The outlook was more bleak in the construction sector, where new orders were down 21.3pc in November, mainly reflecting a sharp fall in civil engineering orders. Construction output fell 14.5pc yr/yr in November, far more than the 4pc average drop in the first eleven months, due to the completion of several large-value projects, including shopping malls or water channels, KSH said. Civil engineering output fell by 8.4pc after increases of several months.

    Average January–November employment, at 2.664m, was down 105,000 or 3.8pc yr/yr. Employment in the business sector fell 133,000 or 6.8pc in the period mainly due to a 81,000 reduction in manufacturing sector employment. Industrial sector employment in the first eleven months of last year fell 11.7pc from a year earlier, and output per head was down 8.5pc in the period.

    Public sector employment in January-November was up 25,000 or 3.4pc but actually fell 4,000 or 0.6pc if those employed in public work schemes were excluded.

    In the 15-64 age group the number of unemployed was 445,000 in September-November, up 116,000 or 35pc from a year earlier. The unemployment rate rose to 10.6pc from 7.5pc in one year.

    January-November gross wages rose 0.5pc, reflecting the crisis, and, in the public sector, changes in the payment of bonuses. Reflecting tax changes, net wages rose more: 1.6pc yr/yr, and real wages fell 2.4pc in the period. Net wages in the business sector rose 4.4pc, partly reflecting a shift towards better-paid, white-collar jobs as the layoffs affected mainly blue-collar jobs.

    Consumer prices rose 5.6pc yr/yr in December, more than their 5.2pc increase in November, pushed up by higher fuel prices. Annual average inflation was 4.2pc last year, down from 6.1pc in 2008 as the crisis dampened domestic demand . Tax changes explained about half of the price rises, as the price index excluding tax changes reflected only a 2.3pc increase.
Within the EU only Romania and Lithuania registered higher inflation and Poland registered a same pace inflation as Hungary.

    Retail sales continued to drop, and their drop was bigger in the second half of 2009 than in the first half, probably due to VAT and tax increases. The sales were down 7.3pc yr/yr in November and fell 5.2pc in the first eleven months. The only segment registering a rise in November was the sales of pharmaceuticals, health care and cosmetic products.

    Sales of vehicles and parts, registered outside retail sales, fell 46pc in November, less than in the previous four months.

    The decline of euro-term foreign trade slowed further, partly on base effects, in November, as exports were down 3.1pc and imports fell 8.8pc yr/yr according to the first reading. The EUR 411m November trade surplus was five times more than a year earlier, and Hungary registered a EUR 4.196n preliminary surplus in the first eleven months compared to a EUR 238m deficit a year earlier as the crisis reduced exports less, by 20pc, in the period than it reduced imports which fell 27pc yr/yr/yr in January-November.

    Hungary's terms of trade improved 1pc in the first eleven months of 2009 as forint-term export prices rose 3.9pc and import prices rose 2.9pc.