Business confidence improves in November
Wednesday, November 29, 2006, 17:23
Ecostat's TOP-100 index, a measure of confidence at Hungary's biggest hundred companies, rose 1 point to 45 in November, Ecostat, the research arm of the Central Statistics Office (KSH), said on Wednesday.
The index has shown better sentiment for the third month in a row, showing big businesses have digested the announcement of tax rises introduced as part of government austerity measures and can now make an accurate assessment of their growth prospects for the next half year.
Managers at Hungary's biggest companies gave better assessments of Hungary's economic situation as well as their own financial standing in November. Still, only 23% of managers said Hungary's economy would grow faster in the short term, while 42% said it would slow, down from 65% who said the same in the previous month.
About 46% of managers said the environment for doing business in Hungary would worsen in the coming six months and just 15% said it would improve. Some 52% of managers said they could expand production in the short term and 73% said they planned investments. However, 46% expected the domestic market to contract, and just 12% said they planned hire new staff. According to 68% of managers, the government's austerity measures would cause Hungary's economy to weaken in the short term.
The managers said they expected consumer prices to increase an average 4.5% this year, one percentage point higher than Ecostat's own projection. The managers put year-end twelve-month inflation at 5.8%, but said their own prices for the year would rise by just 1.9% on average.