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Outlooks of German companies in Hungary improve

Analysis

Photo by Aleks/Shutterstock.com

Assessments and outlooks of German-owned companies in Hungary show improvement, the latest gauge of sentiment by the German-Hungarian Chamber of Industry and Commerce (DUIHK) shows, according to a report by state news wire MTI.

"The outlook of German companies has improved to a large degree this year, and their optimism is at a peak," Finance Minister Mihály Varga said at a forum presenting the results of the survey on Friday.

More companies delivered a positive assessment of their own business situation, and more plan to make investments and raise headcount, he added.

Corporate executives and the government agree that labor costs, a workforce squeeze, and higher commodities prices are the biggest economic risks at present, Varga said.

DUIHK chairman András Sávos said the survey shows propensity to make investments and new hires is at a three-year high. Chamber members are "basically past" the slowdown caused by the pandemic and have reached pre-crisis output levels, he added.

He said supply chain interruptions pose a "challenge for the mid-term".

Sávos said fast wage growth is putting pressure on companies, adding that a reduction in taxes on labor should be the focus of the next long-term agreement on wages.

DUIHK communications director Dirk Wölfer said the survey shows one of every two companies is faced with supply chain interruptions, while the ratio is three-fourths for companies in the industrial sector.

Around half of companies expect an improvement in their own business, while just 10% see things getting worse in the coming year.

About 40% of companies see the Hungarian economy improving, while one in eight companies expect a slowdown.

More than 40% of companies plan to make new hires and spend more on CAPEX.

The DUIHK survey was conducted between September 23 and October 13.

 

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