Industrial output growth accelerated to 7.6% y/y in October, up from the 5.4% y/y growth for the previous month, the statistical office (KSH) reported preliminary figures. The stronger y/y growth was, however, entirely on account of calendar effects in the previous month. Calendar-adjusted industrial output growth actually slowed in October but overall, it has exhibited a relatively stable trend since May with the exception of the weak July print affected by the summer holidays in the car industry. The calendar-adjusted growth has shown some signs of strengthening in the past three months, which we think might reflect the favorable external demand conditions and buoyant domestic demand as well.
In seasonally- and calendar-adjusted terms, industrial output expanded by 1.2% m/m in October but the overall output level trend appeared largely flat since May. We generally expect the industry to remain on a growth trajectory in the short term although the uncertainty around the Opel engine plant in the country remains a source of downside risk.