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Economic sentiment index comes to a halt |

Economic sentiment index comes to a halt

Sándor Laczkó
September 28, 2010

In September, the improvement of the GKI economic sentiment index adjusted for seasonal effects came to a halt after its significant and nearly continuous rise that had started last May. Both business and consumer expectations decreased slightly.

According to the survey conducted by GKI – with the support of the European Union –, expectations became more pessimistic in all sectors of the business sphere except for construction. In industry, this was the result of the deterioration of production prospects and the increase of stocks of own production. Nevertheless, the assessment of production and stock of orders (among this that of exports, too) was even better in the past period than in August.

In construction, the confidence index has been fluctuating within the margin of error in the last four months (it happened to improve slightly in September), i.e. it has practically stagnated. The assessment of production deteriorated and that of stock of orders stagnated in the past three months. Employment expectations for the next three months improved slightly.

In trade, the confidence index dropped notably in September after its increase in July and August. This concerns mainly orders rather than the assessment of sales positions. In services, the confidence index dropped markedly, too, in which both the more pessimistic assessment of the state of business and the deterioration of turnover expectations played an important role.

Intentions to employ became better in industry and construction and deteriorated in trade and services, whereas fear from unemployment stagnated among households. Intentions to increase prices were higher in all sectors, whereas in construction companies planning a reduction in prices were still in majority. Households' inflationary expectations also increased. The assessment of the prospects of the Hungarian economy has fluctuated heavily since the parliamentary elections as a result of different, sometimes contradictory announcements; it deteriorated significantly in September.

Sándor Laczkó

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