The industrial statistics from last year do not give us reason for a big celebration. Still, everything is ready now to get that growth finally going.
State Secretary Péter Szíjjártó explained recently at a professional convention of the automotive industry that the government chose the right strategy to make Hungary one of the centres of production in Europe. While other countries had to face a long stop because of the financial crisis, the Orbán government has been focusing on the manufacturing sector since 2010, and by now the sector’s share is climbing up to one third of gross domestic product (GDP) again.
Orbán clearly prefers industry over services; the otherwise not too squeamish Fidesz politician is giving an especially gentle treatment to the automotive industry. Audi, Mercedes and company returned that favour by dynamically growing production numbers: besides 2.5 million motors already 400,000 cars have rolled off the production lines of the Hungarian production halls this year.
The vehicle industry contributed about EUR 15 billion to the total of HUF 80 billion Hungarian exports last year. The 115,000 employees working for the sector, who according to Szíjjártó have built a European stronghold of automotive production, are the best-earning Hungarians.
It is a fact that industry was the engine of Hungarian growth already during the governance of the social-liberal governments in the beginning of the new millennium. However, due to the financial crisis in 2008 one fifth of the performance was lost – the electronics industry, for example, has still not been able to recover; fewer and fewer televisions and mobile phones are “Made in Hungary”. The experts are expecting a clear overall change for 2014. This would be important in order to give industry the necessary momentum for growth.
The mixed year of 2013 delivered modest 1.4% growth according to the preliminary data published by the Central Statistical Agency, but this did not even fully cover the losses of 2012. On the turn of 2012/2013 the industry output was very negative; April was the first month of growth, although later in the year the numbers improved again. Since September the performance has been steady; the export output of the industry grew to two digits and positive numbers are not only a dream any more in the domestic turnover either.
The domestic market was already a holdback for the less export-oriented industry branches years before the outbreak of the economic world crisis. The Socialists led such a messed-up economic policy that it killed private consumption, even before the foreign exchange credits led to the economic fall of a whole generation. The company of Orbán has without a doubt restored consumption trends on the domestic market: Last year a new wave of state infrastructure projects financed by EU grants was rolled out. The growth of consumption in the private households is still limited, but the returning confidence and the recently raised real wages will surely stimulate the growth of trade. This will have a positive effect on industry as well.
