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GKI consumer, business confidence index slips in September

Both consumer and business confidence deteriorated slightly in September from a month earlier after improving at a near steady pace since May 2009, the latest measures by economic research company GKI show.

GKI's combined measure of business and consumer confidence, prepared with support from the European Union, slipped to minus 11.7 points from minus 9.6 points. The consumer confidence index fell to minus 25 points in September from minus 23.4 points in August. The business confidence index fell to minus 7 points from 4.7 points one month earlier.

Household expectations rose almost every month between May 2009 and June 2010 but have stagnated since. The slight deterioration registered in September was mainly reflected in households' assessments of their own financial position and their ability to make savings.

Business sector expectations deteriorated in all sectors in September with the exception of the construction sector. GKI noted that the construction sector confidence index has been moving within the statistical margin of error for four months.

In the industrial sector, confidence deteriorated mainly due to the worsening outlook for production and the rise in companies' inventories. However, the assessment of production in the previous months and the stock of orders - including export orders -improved from August.

The trade sector confidence index fell in September after rising in July and August. The assessment of order stock worsened noticeably while companies reported a slightly deteriorating sales position.

The service sector confidence index also deteriorated as the outlook worsened.

Employment plans improved in the industrial and construction sectors, but deteriorated in the trade and service sectors. People's fears of unemployment was unchanged from the previous month.

The number of companies planning price rises grew slightly in all sectors, but, among construction businesses, those expecting to see price cuts are still in the majority. Consumers' inflationary expectations increased.

The outlook for the Hungarian economy has been volatile since general elections in the spring, swayed by government statements. The outlook worsened in September. (MTI-ECONEWS)