Economic sentiment index at 10-year peak

After November, the GKI economic sentiment index rose again in December. According to
the empirical survey conducted by GKI (www.gki.hu) with the support of the EU, business
expectations increased slightly, whereas consumer ones went up more strongly, reaching
their ten-year peak (being almost at their level of April 2006). The GKI economic sentiment
index has fluctuated in a relatively narrow band for three years, and now it is somewhere
around the top of this band.

According to GKI, expectations became more upbeat in December in all sectors of the business sphere over the previous month with the exception of the essentially stagnant service sector.

The industrial confidence index rose both in November and December; however, it did not reach its summer peak. This improvement can be attributed mainly to the favourable assessment of the stock of orders (including exports). In addition, the assessment of the production of the preceding period also improved.

However, the evaluation of production prospects and inventories deteriorated. The construction confidence index reached its highest point in the past 15 months. Expectations of structural engineering companies remained unchanged, whereas those of civil engineering companies became more favourable. However, the former ones were still more optimistic.

The assessment of production in the preceding quarter remained unchanged compared to November, whereas that of the stock of orders improved.

The trade confidence index rose noticeably. The assessment of sales positions declined slightly, whereas that of stocks and orders improved significantly. The confidence index of services remained unchanged (decreased within the statistical margin of error) in December compared to the previous month. Although the assessment of the turnover in the preceding period as well as the state of business improved slightly, sales prospects deteriorated markedly.