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SME confidence worsens to three-year low in third quarter

Confidence among Hungarian SMEs worsened to a three-year in the third quarter, the Policy Agenda-Ipsos sentiment gauge published on Wednesday shows.

The Policy Agenda-Ipsos SME index measured 42.2% in September, the lowest level since Q4 2008.

About 64% of SME managers expect Hungary's economic situation to worsen in the coming six months, up from 30% in the second quarter. Only 11% expect the country's economy to improve, down from 32% in Q2.

About 46% of SME managers say they have more capacity than necessary, while only 4% say they require further expansion of capacity. About 74% of managers plan no technological investments in the coming twelve months.

SME managers believe that consumer prices will increase 9.7% in the next twelve months, while sales prices will rise 1.2%.

The survey showed that more than 50% of SMEs are family businesses, namely businesses majority-owned by families. Family businesses generate approximately 15% of GDP and employ 400,000 people in Hungary.

The SME confidence index among family businesses was 41.8%.

Policy Agenda and Ipsos conducted the representative online survey among 700 SME managers.