Wednesday 1 July 2009

UPDATE: Hungary's June Mfg PMI 45.8, Exports Start To Rise

UPDATE: Hungary's June Mfg PMI 45.8, Exports Start To Rise

(Adds details, background.)

By Margit Feher

BUDAPEST (Dow Jones)--The contraction in Hungary's manufacturing sector activity continued in June although at a slightly slowing pace from the all-time low in January as exports started to expand for the first time since September, data released Wednesday show.

The purchasing managers' index was a seasonally adjusted 45.8 in June, a slight uptick from 45.4 in May, the Hungarian Association of Logistics, Purchasing and Inventory Management, or MLBKT, said. The index started to contract in October and hit an all-time low of 38.5 in January.

The data confirm that Hungary is in a deep recession but the expansion of exports in June is a positive sign. The government projects that gross domestic product will contract this year by nearly 7% as the economy of Germany, Hungary's chief export market, is also facing a similar GDP decline.

The export component of the PMI jumped to 50.6 in June, from 45.7 in May, likely helping the manufacturing output indicator to contract less in June than in May. The manufacturing output indicator was at 45.0 versus 44.7.

The import indicator also improved although still showed a contraction. It rose to 43.5, the highest reading since October last year, from 41.3 in May.

Despite the slightly improving economic activity, the new orders indicator contracted further, to 45.1 from 45.4.

Following a six-month period of falling prices, purchasing prices ticked up in June, with the indicator signaling an expansion at 50.7 versus 49.3 in May.

Hungary's PMI index has never before contracted for nine consecutive months in the data's 15-year history, the MLBKT said. It only contracted for five months in a row once, between August and December 1998, it added.

Figures above 50 indicate expansion and below 50 a contraction.

Association Web site:

-By Margit Feher, Dow Jones Newswires; +361-267-0622;

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(END) Dow Jones Newswires

July 01, 2009 04:10 ET (08:10 GMT)

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