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SME confidence index drops in September

Confidence of small- and medium-sized businesses deteriorates slightly in September, according to a survey published on Thursday by Ecostat, the research arm of the Hungarian Statistics Office (KSH). Ecostat's SME confidence index fell 1.9 to 48.8 in September. The index was 9 over the level in May, the year's lowest point, but still under its level of 50.3 in September 2004. One-third of SMEs said Hungary's situation would improve in the next half year, and only a fifth expected it to get worse. About 57% of respondents said their short-term prospects were unchanged, 25% said the future looked brighter, and 18% said things would get worse. About 29% of respondents expected to expand in the short term, 8 percentage points less than in August. Respondents said doubts about tax reforms and Hungary's budget were the reason for the big dip. Some 47% of respondents said they expected new competitors on their markets, and 31% said these competitors would affect their standing. Only 29% of SMEs said they could remain competitive against multinationals, down from 33% in August. About 47% of respondents said their companies planned investments in the future, down from 54% in August.