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UPDATE 1-Hungary's industry output plunges in November

Published 01/08/2009, 03:26 AM
Updated 01/08/2009, 03:32 AM

(Updates with statistics office comment)

BUDAPEST, Jan 8 (Reuters) - Hungary's industrial output fell more sharply than expected in November as both exports and domestic demand suffered, the Central Statistical Office (KSH) said on Thursday.

Industrial output fell by an annual 12.2 percent in November according to unadjusted, preliminary figures, after a 7.2 percent fall in October and came well below analysts' median forecast for a drop of 8.7 percent in a Reuters poll.

The data confirm that the global crisis and a collapse of demand in western Europe are taking a heavy toll on industries and economies across central eastern Europe.

"The decline was broad based and characterised all segments," KSH statistician Miklos Schindele said.

"The trend that began last month continued except that we saw a deepening decline in output drop. Every sector suffered a significant output drop."

According to working day adjusted data, industrial output in November was down by 10.1 percent year-on-year after 7.2 percent fall in October while output fell by 2.1 percent on the month, according to seasonally and working day adjusted figures.

"The most important segments, such as car manufacturing and electrical equipment manufacturing, particularly telecommunications device output -- previously the drivers of growth -- all recorded very sharp output drops... double digit falls," Schindele said.

In the first 11 months of 2008, output was up by 0.4 percent compared with a year earlier.

Schindele added natural gas use restrictions, implemented this week as supplies of Russian gas to Hungary via Ukraine halted, will likely impact future data negatively as big industry is forced to halt production, possibly for a longer period.

Hungary's economy is expected to slide into recession this year and analysts said the dismal November output data signalled that the recession could be deeper than previously forecast.

(Reporting by Balazs Koranyi, editing by Chris Pizzey)

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