German Companies' Outlook for Hungarian Economy Worsens

Analysis

Around 72% of German-owned companies operating in Hungary reported worsening outlooks for the local economy in the next 12 months in a biannual survey conducted by the German-Hungarian Chamber of Industry and Commerce (DUIHK).

 

Just 5% of the companies see the economic situation improving, the survey shows.

The difference between the pessimistic companies and the ones with a positive outlook widened to 67 percentage points from 51 in the spring survey.

Around 51% of companies see their own business situation worsening, well over the 19% ratio in the spring. Concerns were highest in the commerce sector, where 72% of companies augur a downturn in business.

Around half of the companies expect to cut capital expenditures, but just 15% plan layoffs amid the tight labor market.

About 78% of companies said higher energy prices are the biggest risk to business and 57% pointed to a drop in demand.

The survey of 107 companies was conducted between October 4 and 21. 

DUIHK chairman András Sávos noted that the 3,000 German-owned companies in Hungary employ 220,000-250,000 people and generate one-sixth of value added in the business sector.

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