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Gloom and doom grip businesses, consumers

This month GKI-Erste economic confidence index adjusted for seasonal effects showed continued decline. Research reveals further deterioration of consumer expectations for over half a year. Business expectations remained the same following the significant drop in May

Improvements in the business sector can only be traced with regards to industrial expectations, which nevertheless does not compensate for the extent of the drop in May. Despite the fact that expectations and the evaluation of the stock of orders have picked up, businesses’ assessment of the production of the preceding period stagnated. Respondents qualified the stocks of own production somewhat smaller than before.

The picture is similarly gloomy in construction, where the confidence index not only did not pick up but continued to decrease after the huge drop in May. The evaluation of orders witnessed a significant drop despite the fact that evaluation of production level of the past three months remained the same. Civil engineering companies have more favorable prospects this month than companies in structural architecture.

Intentions of employment had been weakening for three months in both industry and construction, while strengthening in the other sectors. The fear from unemployment of households strengthened too.

Service companies assessed the sales of the subsequent period worse and those of the past period better, whereas opinion on the course of the business turned better compared with May.

The confidence index of trade dropped significantly following the slight decrease in the past two months. The assessment of the orders deteriorated the most but sales positions were also considered to be unfavorable. The evaluation of stocks remained unchanged.

The consumer confidence index once again decreased. Households assessed their future financial situation, saving capability and the possibility of purchasing high-value durables worse than before.

Intentions of price increases weakened in all sectors, whereas inflationary expectations of consumers strengthened slightly.

The evaluation of the prospects of the Hungarian economy continued to deteriorate in all sectors as well except for industry and among consumers.