Hungary’s business climate improved marginally in September, with the GKI business cycle index rising by one point, according to GKI Economic Research’s latest monthly survey.
‘The willingness of businesses to employ improved slightly, and the aggregate expectation of expected sales prices increased very slightly compared to August,’ GKI said in its report. ‘The predictability of the business environment became somewhat more favourable.’
Prior to the current increase, the business climate index had risen by 11 points between January and July, reaching a four-and-a-half-year high, before seeing a four-point drop in August.
Sectoral improvements
The September increase was driven by improvements across most business sectors.
Industry recorded a three-point rise in confidence, while construction increased by one point and trade by two points. Business services was the only sector to record a decline, falling by three points.
Employment expectations also improved slightly. Over the next three months, 8% of companies surveyed expect to increase their workforce, compared with 7% in August, while the proportion planning to reduce staffing fell from 13% to 12%.
‘In all four sectors examined, those seeking to reduce their staff are in a slight majority compared to those planning to expand, with construction industry respondents proving to be particularly pessimistic in this regard,’ GKI noted.
Economic predictability
Businesses also reported a slight improvement in the predictability of the economic environment.
‘Industrial companies felt the environment was more predictable, while trading companies reported a deterioration in this area,’ GKI added.
Elsewhere, expected selling price pressures increased only marginally. Some 18% of companies said they planned to raise prices over the coming three months, compared with 16% in August, while 8% planned to reduce prices, up from 7%.
Finally, consumer confidence was broadly unchanged in September, compared to August. The GKI Consumer Confidence Index stagnated in September after previous deterioration. The assessment of Hungary’s economic situation over the next 12 months fell by one point, while households’ assessment of their financial position over the previous year increased by five points.
Expectations for household finances over the coming year changed little, while the assessment of the ability to purchase high-value consumer goods fell by four points. Read more here.
