Exports drove Hungary’s industrial growth in September

Hungarian industrial export sales volume rose by 11.5 percent in September, while domestic industrial sales increased by 2.8 percent year on year, according to KSH’s detailed release published on November 13. This points to different demand conditions for Hungarian suppliers: the order books of businesses producing for foreign markets and those relying on domestic customers need separate examination.

Total industrial output “increased by 8.2%” compared with September last year, in a translation of the statistical office’s wording. This is unchanged from the first estimate; Friday’s new contribution is the detailed breakdown. Seasonally and working-day-adjusted monthly growth was 0.9 percent.

In brief

• Foreign sales grew faster than domestic sales.
• The office left its annual output estimate unchanged.
• The detailed structure helps distinguish company prospects from the national picture.

Different comparisons

Annual and monthly indicators answer different questions. The former places production against last year’s base, while the latter compares it with the immediately preceding month after seasonal effects have been removed. Adding or subtracting them would be misleading. A volume indicator removes the effect of price changes, so changes in a company’s financial revenue must be examined separately.

Our interpretation is that assessing supplier risk requires customer concentration, contract duration and delivery schedules alongside aggregate growth. A favourable export figure does not establish every domestic customer’s ability to pay. Building inventories and actually delivering orders can also create different business conditions; company data are needed to distinguish them.

Our article on October inflation provides context on costs, while KSH’s farm survey explains another aspect of sectoral data collection. Neither replaces order and pricing information for the industrial company concerned.

The next public reference point will be the first estimate of October industrial output on December 7, followed by detailed figures on December 15. Those releases will allow readers to examine whether export and domestic sales continued on different paths.