Patiently Awaiting the Slow Awakening
The economic shutdown remains in place but, whisper it who dares, the early shoots of life (if not recovery) are discernable, appropriately enough post-Easter and well into spring. The thing to watch for is that there is no frosty coronavirus bounce back to kill off that new growth and send us all back under the duvet. Managing that kind of situation is well above my pay grade, but it is a matter of grave concern for all of us.
These are early days; we are far from the end of the crisis. Hungarian modeling (and if there is one thing Hungarians are good at, it is mathematical modeling; just ask Morgan Stanley) indicates that the current COVID-19 infection peak will be on May 3. By that date (or at the latest May 4), Prime Minister Viktor Orbán has promised what he calls a “full self-defense plan”, building in part on the experiences of other states, to “present to the country a sober, reassuring plan of consequence.”
Of major interest to many businesses, not to say the wider public, will be when we might see a lifting of the “stay at home” orders (confusingly, the government insists on using the word “curfew” in its official English language communication, although that is clearly the wrong word since there is no compulsory overnight “lock down”) and in what format. Will children be able to return to school before the end of the academic year on June 15? Will those aged 30 and under be able to return to non-essential work, or those who have a certificate of clean health, or who have had the virus and therefore have some immunity?
While we wait to hear the detail of the return to work, the good news for the Hungarian economy is that one of its major driving forces, automotive, is beginning to shake off its unsolicited hibernation. Daimler and Suzuki have said they will restart production in a limited way at their units in Kecskemét and Esztergom later this month. Audi went back to work in Győr last week, though it has cautioned it will take a number of weeks before it is at anything like full production. PSA Group’s Opel engine factory at Szentgotthárd says it is ready to restart production as and when market circumstances and regulations allow. Component supplier Hankook Tire has restarted work at its factory in Rácalmás, south of Budapest, while Denso has also started to resume production in Székesfehérvár.
These are only baby steps, but they are at least steps, and the stride pattern will lengthen over time as work levels increase and more calls are made to the local supply chain to ramp up their own production output. One can but worry what the casualty levels might be among Hungary’s SMEs, but that is a situation the country, and the automakers, will simply have to face once the time comes.
Until then, I hope your own business contingency planning is going well, and that we will all be back to work soon. Keep well and stay safe.
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