According to the barometer, the most significant challenges cited were the complexity of the regulatory environment, labor shortages, and intense market competition.
EY surveyed more than 1,000 business owners across 16 countries, including Croatia, Hungary, Poland, Romania, Serbia, Slovakia, and Slovenia. The analysis covered professional areas such as investment sentiment, evaluation of the financing environment, challenges related to hiring, growth prospects, attitudes toward innovation, and the adaptation of artificial intelligence solutions.
“At EY, we’ve been actively supporting entrepreneurs for more than 20 years, including through the EY Entrepreneur of the Year program. Our goal with this survey is to show where Hungarian businesses stand in a regional comparison and highlight the areas where targeted development programs or even external consulting support could lead to the greatest progress. This can provide tangible support for owners and a competitive advantage for the Hungarian economy,” emphasized Tamás Vékási, country managing partner at EY Hungary.
The current turbulent economic environment is prompting caution across the entire region, with Hungary being especially affected. The majority of Hungarian entrepreneurs indicated that market uncertainties may hinder their investment plans. Consequently, Hungarians make less use of loans or state subsidies compared to neighboring countries. Instead, they primarily rely on reinvesting their profits to finance operations.
For Hungarian respondents, the largest expenses are labor costs (65%), raw material and supply costs (32%), energy and utility fees (30%), and technological developments (22%), which aligns with international findings.
This caution is also reflected in growth plans. Across Central, Eastern, and Southern Europe, businesses are prioritizing developments that yield immediate results. Hungarian respondents intend to spend primarily on purchasing new machines or upgrading existing equipment, as well as updating and replacing their IT systems (54%) over the next 12 months.
State Secretary for the Development of Small- and Medium-Sized Enterprises, Technology, and the Defense Industry Richárd Szabados, of the Ministry for National Economy, stated at the press event that, as the survey shows, domestic SMEs are currently more cautious about starting investments, which is why the government has launched several incentive programs, including the Sándor Demján Program.
According to Szabados, its impact is already visible, with a continuous increase in demand for low-interest loans. So many development requests have come in for the non-refundable grants that the initial available funding had to be increased.
He said that the goal is for every business to find the supported financing option necessary for growth.
For Hungarian respondents, the most significant challenge is the regulatory environment. About one-third of entrepreneurs said it often hinders innovation, and the complex conditions can be difficult to navigate. The study also confirmed that simplifying regulatory conditions could provide more space for innovation efforts.
However, it’s important to consider that several key regulations, such as GDPR (data protection), the recently introduced NIS2 (cybersecurity), and various sustainability measures (CBAM, the carbon border tax, and EUDR, a deforestation regulation), are mandatory for EU member states.
There is reason for optimism, as only a small fraction of Hungarian businesses are planning layoffs in the next 12 months. More are planning to hire additional full-time employees (29%), although the majority do not plan to change the size of their workforce.
Whether companies can attract talent is already a pressing issue for many. Finding candidates with the necessary skills and experience and putting together competitive compensation packages are serious challenges for respondents.
Only a quarter of the Hungarian business owners surveyed have invested in AI, although they expect greater advancements in operational efficiency from the technology than the regional average. Most respondents reported using AI for personal development, data analysis, or creating marketing content, although the technology could be applied much more broadly.
Educating entrepreneurs, forming appropriate strategic partnerships, and introducing programs that promote the responsible use of artificial intelligence could significantly boost the efficiency of Hungarian companies.
“Geopolitical uncertainty, the emergence of new technologies, and a tight labor market present complex challenges for businesses,” said Csaba Horváth, partner at EY-Parthenon. “However, the EY Entrepreneurial Barometer data clearly shows that, in addition to maintaining operational stability, Hungarian business owners also have the intent to grow. This requires solid foundations, regular analysis of operational risks and opportunities, and the ability to manage and exploit them,” he said.
“This can be done effectively through an independent audit involving reliable partners with appropriate expertise and experience. With this, owners can not only stabilize operations but also lay the groundwork for future, sustainable development. I am convinced that this can be a major competitive advantage. With our support, businesses can fully unlock their potential and continue to build a competitive future in Hungary,” Horváth added.
Succession planning is becoming an increasingly urgent issue for more Hungarian family businesses. Given their size and significance, how this process unfolds is critically important from a national economic perspective. Yet only a quarter of owners have a formal succession plan.
While this figure exceeds the regional average, structured planning still does not receive sufficient attention among the majority of respondents. For long-term financial stability, key development areas may include financial education for heirs and regular advisory reviews, currently practiced by only 9% of businesses.
This article was first published in the Budapest Business Journal print issue of June 27, 2025.
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