Monthly output and demand data for September substantiate weak Q3 GDP figures

HUNGARY - In Brief 07 Nov 2024 by Istvan Racz

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While Mr. Orbán appears to be absolutely delighted by the outcome of the US presidential election, the macro analyst is forced to be in a somewhat less enthusiastic mood today. Industrial output fell by 0.7% mom, -5.8% yoy, making the Q3 yoy growth figure -5.4%, the worst so far this year. In January-September, output decreased by 4.3% yoy. The fixed-base chart (Dec 2010 = 100) below tells a bit more about all this: In essence, the volume of industrial output reached its peak level exactly two years ago, and it has been decreasing since then, following a roughly straight line heading downwards. Without giving away any specifics on the details, KSH briefly said that in yoy terms, output fell in 'the predominant majority of manufacturing sub-sectors', mentioning, as for the more important ones, cars, electric engineering (batteries are included there), and electronic and optical products. The production of food, beverages and tobacco was up, on the other hand. Here we would like to mention that much of the industrial sub-sectors, from metallurgy to chemicals (tyres included there) sell on large scale to the (domestic or foreign) car industry, and so car manufacturing actually has a far more important influence on the whole of domestic industry than it looks at first glance. Retail sales data look definitely better, but the results of the most recent months are also quite unfavourable. In September, the volume of sales fell by 1.4% mom, while in increased by 1.9% yoy. This made Q3 growth +2.8% yoy, just slightly below the so far strongest (in this cycle, we mean) 2.9% number of Q2. In January-September, this implied 2.4% yoy growth, just too modest compared to the officia...