CEE ECONOMY-Czech, Hungarian industrial output charges ahead amid supply woes
July 7 (Reuters) - Czech and Hungarian industrial output jumped in May on a year-on-year basis as recovery in central Europe remained on track, although a global shortage in components and materials showed signs of weighing on the rebound.
Hungary's industrial output soared 39.1%, below analyst forecasts for a 43.3% year-on-year rise, according to the Central Statistics Office (KSH).
In the Czech Republic, working-day-adjusted industrial output rose by a lower-than-expected 25.3% year-on-year.
The year-on-year jump in output comes a year after the initial wave of the coronavirus pandemic walloped production. Industry, though, has stayed running since then, despite harsher waves of COVID-19 infections.
With restrictions on retail and leisure being lifted around Europe in the second quarter, factory orders have jumped - and Wednesday's data showed Hungarian output at pre-pandemic levels. But manufacturers are facing supply problems that are not derailing the recovery but are still a drag on growth.
"Domestic producers are not short of orders; however, a lack of components and raw materials (is starting) to hinder further industrial growth," said Radek Matejka of the Czech statistics office, commenting on a month-on-month decrease in output of 3.6%.
The car industry is seeing the most visible effect. With a global semiconductor shortage, carmaker Skoda Auto, the largest Czech exporter, has cut some shifts and halted some production - a move that hits suppliers along the chain.
It shows the bumpy road to recovery as central European economies are estimated to post solid growth in 2021 after contracting in 2020.
"I have heard from some industry players... that components are not coming as they should be and they are trying to adjust production accordingly," David Nemeth, an analyst at K&H Bank in Budapest, said.
"They say this could be back to normal by the beginning of next year, so this is there as a risk; this could weigh on output growth." (Reporting by Jason Hovet in Prague and Krisztina Than in Budapest; Editing by Toby Chopra)
