Industrial output falls 2.3 percent in September as chip shortage weighs

Industrial output in Hungary fell by an annual 2.3 percent in September as the global chip shortage impacted the local automotive industry, the Central Statistical Office (KSH) said on Friday.

Output of vehicle manufacturing “fell significantly” in September as the global semiconductor shortage caused factory shutdowns, KSH said in the first reading of data. Output of the computer, electronics and optical equipment segment also declined, while output of the food, drinks and tobacco segment rose, it added.

Adjusted for the number of work days, output fell by 1.7 percent.

In a month-on-month comparison, output edged down a seasonally and workday-adjusted 0.3 percent.

ING Bank chief analyst Peter Virovacz said supply chain interruptions, parts shortages and the labour squeeze present “serious downside risks” in the fourth quarter. Weaker exports paired with stronger import demand driven by consumption and investments could weigh on GDP growth, too, he added.

Erste Bank analyst Janos Nagy said the global supply crunch could impact industrial output in October, too, although he noted that new capacity in battery manufacturing and the chemicals industry could help offset the poor performance of the automotive sector.

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