GKI’s economic sentiment index fell sharply in November, falling below its level in early summer. According to a survey conducted by Budapest-based GKI Economic Research Co. with the support of the EU, this is a consequence of falling business expectations.
The consumer confidence index rose minimally recently, although due to its decline in the previous three months, it also fell short of its June level (within the statistical margin of error). Households were interviewed in early November and companies in mid-November.
Deterioration in incoming orders
In the business sector, the confidence indexes of services and trade fell dramatically, close to their lowest points in April, and the increase in pessimism in industry was also very significant.
However, construction companies became more optimistic markedly, although this is far from their pre-pandemic optimism in March. The decline in the industrial confidence index in November was mainly due to a deterioration in incoming orders (including in part exports) and production expectations. The inventory situation improved slightly. The assessment of the production of the recent period improved. At the same time, in the opinion of respondents, their investments will decline compared to last year and they plan that only their expenditures will stagnate next year. Expectations of construction companies improved a lot in November, presumably due to the new government measures to support housing construction and renovation. The assessment of incoming orders improved significantly.
Corporate pessimism
The trade confidence index came close to its April decade low in November. The assessment of sales positions fluctuates at a very low level, it decreased in November, and that of expected orders fell significantly. However, the assessment of inventories improved slightly. The pessimism of services increased markedly in almost all areas, including sales expectations.
The willingness of the business sector to employ weakened again in November, and the number of companies planning to reduce their staff exceeded again that of those intending to increase it. The deterioration in services was dramatic, its rate was close to that of April. In construction, on the other hand, intentions to employ even strengthened. The fear of unemployment of households weakened slightly after three months of decline. Intentions to raise prices decreased in all sectors with the exception of services, whereas the inflationary expectations of consumers strengthened further. The assessment of the future of the Hungarian economy in the business sector this year, with the exception of April, has never been as pessimistic as in November, and the deterioration was most significant in services. However, households became a little more optimistic.
The minimal improvement in consumer expectations partly reflects a more favorable assessment of households’ own financial situation. The assessment of savings possibilities remained unchanged. The ability to purchase high-value consumer durables improved slightly.


Leave a Reply Cancel reply
Top 5 Articles
Roche Expands its Budapest BSC portfolio February 15, 2021
Gateway to Hungary December 27, 2019
Fornetti, the Hungarian bakery appears in London April 3, 2013
Hungarians In The French Foreign Legion April 29, 2009
An Emissary of Business Relations December 23, 2019
No comment yet. Be the first!