Hungary confidence indices improve somewhat in April

There was a slight improvement in the GKI-Erste confidence indices following a plummet observed in March. Business confidence rose palpably while consumer confidence grew only marginally, and both remained below their respective February levels.

As the survey, conducted by GKI with EU support, shows, the five-month continuous erosion in the consumer confidence index (and an especially sharp fall in March), the indicator has finally risen, albeit within the margin of error, to -36.8 points.

The GKI-Erste economic confidence index adjusted for seasonal effects came up some to -9.1 points in April from -10.7 pts in March.

The 12-month outlook of households on their financial status has worsened, while they have become more upbeat about their savings capacity from a month ago. The respondents’ see their prospects for buying high-value consumer durables as improving currently, but they have turned more downbeat concerning their 12-m outlook in this respect.

The industrial confidence index continued its rise that has been unfretted for two years now and hit its highest yet in 2011. The assessment of production levels and orders, including export orders, improved, while the respondents felt their stocks have shrunk. Capacity utilisation rose to over 80%.

The confidence index in construction has remained practically unchanged compared to March. Opinions over the level of production in the preceding three months worsened but the staff expansion intentions strengthened.

Expectations

After deteriorating for two months in a row, expectations in trade improved marginally. While expectations on orders have worsened further some, the respondents considered their sales position and level of stocks as moderately improving.

Within the business sphere expectations in services fell slightly in April.

Intentions to hire new staff changed differently in each sector: they have improved in the construction sector, stagnated in the industry and worsened in the trading and services segments. Intentions to raise prices moderated, while consumers’ inflation expectations heightened. While industrial companies expect smaller price hikes than a month ago but in a wider scope of products. The ratio of those expecting decreasing producer prices in the construction sector was higher than those expecting rising prices - even higher than in March.

The assessment of the perspectives of the Hungarian economy improved somewhat in most industries and among consumers following a spectacular decline in March, but a significant deterioration was observed in this regard in the construction sector.