Slight Improvement in SMEs' Profit Expectations

The earnings expectations and investment intentions of micro, small and medium-sized enterprises in Hungary improved slightly in November last year compared to the previous quarter, while their sales forecasts stagnated, according to the latest survey of the K&H SME Confidence Index.

According to a K&H statement sent to MTI on Monday, the survey summarizing expectations for the next 12 months showed that firms expect sales to grow by 8.6% and profits to expand by 4.4%, with revenue growth unchanged from the previous quarterly survey and profit expectations up slightly from 3.3%. 

The statement quoted the head of SME marketing and sales support at K&H, Zoltán Rammacher as saying that financial profit expectations are increasing in line with company size. Micro firms expect a below-average increase in turnover of 7.8% and profit growth of 3.7%, small firms expect an increase in turnover of 8.9% and profit growth of 4.5%, while medium-sized firms expect an increase in turnover of 11.8% and profit growth of 7.4%.

At the end of November last year, 66% of firms said they were preparing to make some kind of improvement in the next year, up from 61% in the previous quarter.

In terms of investments, the purchase of machinery and equipment rose from 22% to 29%, 29% of firms plan to make IT improvements, and 20% are preparing to replace or expand their company car fleet.

K&H reported in early January that the confidence index summarizing the one-year expectations of micro, small and medium-sized enterprises improved from minus 14 to minus 7 points in the last quarter.

K&H has been conducting a quarterly survey on SME expectations since 2004, the latest survey was conducted among decision-makers of 400 Hungarian-based companies with annual sales of less than HUF 2 billion, conducted by Impetus Research between November 7-25, 2022. The survey examines the ten economic factors that most influence the economic situation of businesses: customer relations, supplier relations, workforce, company finances, banks, economic policy, public charges, EU, competition and corporate lending rates.