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Sentiment at Hungary’s biggest companies to worsen - extended

  Sentiment at Hungary’s biggest hundred companies continued to worsen in February as narrowing demand on the country’s biggest export markets as well as the domestic market created a pessimistic outlook, Ecostat, the research arm of the Central Statistics Office (KSH), said on Wednesday.

Ecostat’s TOP-100 measure of confidence at Hungary’s biggest companies fell seven percentage points from January to 49% in February.

Output dropped at 65% of the biggest companies in the past three months, managers surveyed by Ecostat said. Output was unchanged at 26%. The outlook for production in the next three months worsened slightly, with 59% of companies expecting a decline and 26% projecting unchanged output.

Falling domestic demand was projected by 43% of companies, while 45% said demand would stagnate. On export markets, 37% said demand would fall and 46% said it would remain unchanged, and 17% expected demand to increase. 28% said their ‘s competitive position on the domestic market would weaken, while just 20% said it would strengthen.

About half of the big companies said stock levels were in line with the seasonal average. 17% said stocks were higher than usual.

One-fifth of companies said stock of orders was significantly down from the same period a year earlier.

Almost 60% of companies plan layoffs. Just 9% said they wanted to make new hires.

Big companies expect the “chain of debt” among suppliers to continue to grow in the next six months. They see lending conditions tightening.


The outlook at SMEs continued to worsen as well. Ecostat’s SME confidence index slipped more than seven percentage points in February to 54%.

About 63% of SMEs said production fell in the past three months. 28% said it stagnated. As the economic crisis deepens in the coming three months, 58% said production would drop and 28% said it would stagnate.

Most SMEs blamed poor domestic demand, the uncertain economic environment and high labor costs for their trouble. About half see domestic demand falling further, and 39% think it will stagnate. 36% expect demand on foreign markets to drop and 58% see it remaining unchanged.

The percentage of SMEs who said production would drop in the coming three months rose to 58% in February. 28% said it would remain unchanged.

One-third of SMEs said order stocks were level with the seasonal average. 63% said they were lower than usual.

About 80% of SMEs said they had no expansion plans. About half of SMEs said they were overstaffed, and 10% saw a potential for an increase. (MTI-Econews)