Industry and retail sales figures for July: neither good, nor bad

HUNGARY - In Brief 06 Sep 2024 by Istvan Racz

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Industrial output and retail sales have just been reported by KSH for July. Both were completely unchanged during the month (changing by 0.0% mom in volume terms, seasonally and day-adjusted). For industry, this meant -6.4 yoy, following -3.5% yoy in Q2 (-3% yoy for H1 in total). For retail sales, turnover was up 2.4% yoy in July, after +2.9% in Q2 (+2.3% yoy in the whole of H1). It would be easy to conclude that these numbers are simply bad, because the fallback by industrial output in year-on-year comparison aggravated further, and as consumption did not offer any extra compensation for that negative result. But not so fast, please. The deepening of the industrial hole in year-on-year comparison was entirely due to a base effect: output expanded by 2.8% mom in July 2023, against the stagnation in the same month of this year. What we find more positive (or less negative, according to the Reader's choice) is that the previous long trend of falling output did not continue in the latest two months, as output grew by 0.5% in June and stagnated in July, as we said above: Industrial output Note: Fixed-base chart, data in volume terms, December 2010 = 100; Source: KSH As for retail sales, yes, it does not look very impressive indeed, but now we know from KSH's detailed GDP data, just published the other day, that the monthly retail sales indicator keeps underreporting household consumption growth. mainly because of not covering services. The new retail sales data may imply some 3.5% yoy growth for household consumption for July, just roughly. This is still not that impressive, for sure, and many will find it disappointing that growth fails to accelerate progressively, in lin...