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Chip shortages in the car sector again dragged heavily on Czech and Hungarian industrial output in October, leading to a weak start to the fourth quarter.
Data on Tuesday showed Czech factory output fell 4.9% in October, the biggest drop since June 2020. The decline was smaller than expected, but deeper than in September. Hungary’s industrial output dropped 3.4%, also more than expected.
The two countries and Slovakia all rely more on the car sector than neighbouring Poland, which posted industrial growth of 7.8% in October, according to data on Nov. 22.
Central Europe’s economies are bracing for a slowdown to end 2021 as industrial woes bite and domestic demand becomes more of a driver for recovery.
Peter Virovacz, a senior economist at ING in Budapest, said there were “still serious supply chain problems” affecting the car and electronics sectors.
“It looks like the problems affecting the two most important sectors for industry in Hungary will not be quickly solved, so now the emphasis is on sectors with a smaller weight, on how much they can drive industrial production,” he added.
In the Czech Republic, the automotive sector makes up a quarter of industrial output. The statistics office said component delivery issues in car production had also started affecting related industries, such as tyre producers.
The country’s biggest exporter, carmaker Skoda Auto, stopped work for two weeks in October because of global chip shortages, but said on Nov. 24 it had production secured for the next month.
Last week, it said it was producing at about 75%-80% of capacity, with the renewed flare-up in the COVID-19 pandemic another problem as workers are left at home.
Its parent group Volkswagen however has said the worst supply chain issues may be behind the carmaker.
Separate data on Tuesday showed Romania’s economy expanded 7.4% year-on-year in the third quarter, while Bulgaria grew by 4.6%. Both were slower than in the second quarter.
“In sequential terms, the underlying picture looks weaker, with the economy excluding agriculture output stagnating in the third quarter,” Romanian bank BCR’s Chief Economist Ciprian Dascalu said in a note.
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Around 198,300 new cars were registered in November in Germany, according to the federal transport authority (KBA), 31.7 percent fewer than in the same month last year.
Depending on models and variants the waiting period can range from weeks to months in the domestic passenger vehicles market at present.
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