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GKI-Erste confidence index rises slightly in November

Economic think-tank GKI’s combined monthly index of business and consumer confidence in Hungary prepared jointly with Erste Bank rose to minus 23.2 points in November from minus 24 points a month earlier, GKI reported at the weekend. The seasonally-adjusted index stopped declining after falling for more than six months, GKI said.

Within the composite index, the business confidence index improved 0.9 points, while the consumer confidence index rose 0.3 points.

The business confidence index improved thanks to service companies as their expectations returned to September’s level. Service companies’ opinions on current operations worsened but were more than offset by expectations for higher future turnover.

Industrial expectations minimally worsened as the assessment of production in the past period and that of the order stock including export orders deteriorated, while the assessment of stocks and the production outlook improved.

The construction sector confidence index was stable after improving in October, with no change in the assessment of the order stock.

The trade sector’s confidence index rose less than it declined in the previous month.

Plans to make new hirings improved slightly among industrial and service companies, were unchanged in the construction sector and deteriorated in the trade sector. People’s unemployment fears lessened.

Companies’ plans to increase prices strengthened across all sectors, although in the construction sector the number of those planning to reduce prices still exceeds the number of those expecting to increase prices. More trade companies planned price increases than in October, and the size of the planned increase was also bigger.

 

Households’ inflationary expectations also increased.

 

The assessment of the position of the Hungarian economy in the coming period improved in the industry and among service providers, while deteriorating in the construction and trade sectors, and households have also become more pessimistic in this respect.

 

People were also more pessimistic in November as regards their own financial position in the coming 12 months, but their assessment of their own capability to make savings was unchanged. People thought it more likely that they would be purchasing consumer durables than a month earlier.