GKI Business Climate Index at a 19-month Low

In the first month of this year, the slightly negative trend continued: according to the survey conducted by the GKI Economic Research Institute with the support of the EU, the outlook for both the business sector and consumers deteriorated compared to December, although in both cases only within the statistical margin of error. Even so, the GKI business climate index slipped to a 19-month low. However, the predictability of the business environment improved slightly.

The GKI business confidence index fell within the statistical margin of error in January, but still slipped to a 50-month low. The industrial and construction confidence indices rose within the margin of error compared to the previous survey. However, the trade index fell slightly and the business services confidence index fell sharply. Trade remains the least optimistic sector and business services the most optimistic.

The employment indicator, which measures the overall employment propensity of businesses, fell slightly in January compared to December, bringing the indicator to a 19-month low. Employment intentions deteriorated in industry, construction and services compared with the previous month, while the outlook for trade improved. Over the next three months, 9% of businesses are preparing to expand their workforce, while 14% are planning to lay off workers.

After two months of deterioration, the perception of the predictability of the business environment improved markedly in January compared to December.

The price indicator, which condenses business price plans into a single figure, fell slightly in the first month of this year compared to the previous month. Only in the distributive trades were price plans stronger, while they weakened in the other sectors. Half of firms plan to raise prices in the next three months, while only 5% plan to cut prices.

The GKI Consumer Confidence Index barely changed in the March-September period, before starting to decline markedly in the autumn months last year. A positive correction in December was followed by a slight decline in January. Residents felt their financial situation over the past 12 months was slightly better than the previous month. At the same time, their own financial outlook for the next 12 months and the country's economic situation were also assessed as worsening. The perception of own money to spend on high value consumer goods remained unchanged on a monthly basis. The public's inflation outlook fell slightly, while the outlook for the number of unemployed people improved slightly compared with the last month of last year.