Business confidence edges up as consumer sentiment weakens

Analysis

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Economic research institute GKI's combined gauge of business and consumer confidence rose to 0.5 points in September from -0.6 points in the previous month, supported by an improvement in sentiment among companies, according to a report by Hungarian news agency MTI.

GKI's business confidence index rose to 6.5 points from 6.1 points.

Among industrial companies, the outlook for export orders and inventories improved, but assessments of production in recent months, domestic orders and the outlook for production deteriorated.

In the construction sector, expectations improved among both building companies and civil engineering companies. Businesses were more positive on production in recent months as well as orders. The labor squeeze and a shortage of materials and capacities remain the biggest challenges in the sector.

Sentiment in the commerce sector improved after declining for two months in a row as companies were more optimistic about their sales positions, inventories as well as prospective orders.

Companies in the service sector said the climate for doing business was worse, but still expected higher sales.

GKI's consumer confidence index fell to -20.3 points in September from 19.7 points in August. Households said their financial situation "worsened significantly". More said they could make savings and they were also more optimistic about their ability to make big-ticket purchases.

GKI's economic sentiment survey is supported by European Union funding.

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