German Companies in Hungary Wary of Economic Challenges - DUIHK Survey
Global economic processes and risks, as well as domestic general framework conditions, pose significant challenges for the member companies of the German-Hungarian Chamber of Industry and Commerce (DUIHK).
This is confirmed by the results of the chamber's latest economic survey, which gauged the economic sentiment of some 209 companies.
According to the survey, the mood regarding the country's economic situation fell dramatically spring of 2022, following the outbreak of the war in Ukraine, and has only improved slightly since then. In the current survey, every second company expects further deterioration in the general economic situation – only 12% of respondents expect improvement. This ratio is almost identical to the spring results.
Some 40% of the companies rate their own business situation as good, and only every tenth company reported a bad business situation. These data are almost unchanged compared to the spring survey and correspond to the average of the years since 2019. However, companies' own business expectations have significantly weakened: only 18% of respondents expect improvement, while 34% expect deterioration. In spring, this ratio was still 28% – 26%.
The balance of positive and negative expectations has therefore decreased to -17 percentage points and slid into negative territory for the first time in 13 years. Only during the financial crisis of 2009 was a lower value measured.
In industry and commerce, pessimism is stronger than average; large companies, based on the number of employees, are more skeptical about business prospects than average.
These restrained business expectations are also reflected negatively in investment and employment intentions. For the first time in 10 years, more companies intend to reduce their investment expenditure (37%) than increase it (25%). In terms of employment plans, this ratio is almost balanced (18% plan to increase staff numbers, 21% plan to decrease) – however, in contrast, the employment balance has been continuously positive over the past 10 years. In terms of investment and employment plans, industry and large companies are even more cautious than average.
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