In the late 1980s, the government's defense industry produced only a small amount of the HPA's needs. Major weapons were obtained from the Soviet Union. Communications and instrumentation equipment made up about three-quarters of the country's military production, while artillery and infantry weapons and ammunition made up another 12 percent. The production of vehicles and aviation components contributed about 8 percent, while chemicals and light industrial products formed the remaining 5 percent.

In early 1989, military industries anticipated a 31 percent decline in production compared with the previous year because of the slashed military budget and a drop in exports. Factories that produced mostly military equipment were expected to be hard hit. Military orders, mostly long-range microwave equipment and accessories, made up about 80 percent of the production of the Precision Mechanics Enterprise. Military orders for handguns made up 35 percent of the Weapon and Gas Appliance Factory's production and 25 percent of the orders for the Diosgyor Engineering Factory. The Machine Factory at Godollö , which produced components for military vehicles and tanks and repaired army equipment, was owned by the Ministry of Defense and operated by soldiers. In January 1989, it was operating at 50 percent of capacity because orders from the other Warsaw Pact countries dropped by 50 percent and a cut in sales to the HPA was anticipated. The military production of the Videoton telecommunications factory, valued at US$132 million in 1988, was expected to fall to US$84.9 million in 1991, and more than 2,000 of its 7,000 workers were expected to be released, resulting in a 40 percent idle manufacturing capacity. The effects of cutbacks in military procurement on the euphemistically named "Lamp Factory" (Lampagyar), which produced pistols and automatic rifles, and the Danuvia Factory, which manufactured machine guns, was not known.

Data as of September 1989