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6 of June, 2017Research
Corporate reactions to the raise of the minimum wage and the guaranteed minimum wage

This brief analysis is to study what steps national corporations have already taken or they plan to take in 2017 concerning minimum wage raise and the increased guaranteed minimum wage for the skilled workforce in 2017. In the analysis eight taken or due steps in 2017 will be examined: (1) to avoid wage disparity those earning beyond the level of minimum wage will have a wage increase: (2) planned staff recruitment will be cancelled; (3) there will be layoffs; (4) planned investments will be postponed; (5) the scope of activity and tasks of those employees affected by the wage increase will be modified; (6) the affected employees’ employment will become part-time employment; (7) the benefits of the affected employees will be cut; (8) variable pay/at-risk pay will be decreased (bonuses, on-target earnings).

This study used the research conducted in April 2017 on corporate prosperity by HCCI (Hungarian Chamber of Commerce and Industry) IEER (Institute for Economic and Enterprise Research); during this research more than 3200 corporate leaders provided answers to the research questionnaire.

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10 of March, 2017Research
Corporate credits in Hungary, 2012-2016

In the following short analysis the Institute for Economic and Enterprise Research (IEER) examines the factors determining corporate borrowing and willingness to invest in Hungary. In the recent years several policies aimed to stimulate borrowing activity among Hungarian companies such as the reduction and the continuously low level of the central bank’s base rate or the Growth Loan program announced by the Hungarian National Bank. In our analysis three factors influencing the willingness to invest are examined: (i) interest margin and the development of interest rate environment, (ii) the quality of institutional and regulatory environment and (iii) the business climate and expectations of companies. Despite the policies implemented by the Hungarian National Bank interest margin is relatively high in Hungary in regional comparison making it difficult for companies to access financial resources. The uncertainty of institutional environment can make market players cautious as well. Business climate however, shows positive prospects, which means that business outlook does not explain the low demand for loans. In the future the reduction of interest margin, the improvement of institutional environment and competitiveness could have a positive effect on corporate borrowing and investments.

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2 of March, 2017Research
Internet usage among Hungarian SMEs

In its analysis the Institute for Economic and Enterprise Research examined the practices relating to internet usage among domestic small and medium sized companies. The analysis is based on the data of the January 2017 SME Outlook survey of 300 small and medium enterprises that have at least 20 employees. Beside the most general uses (maintaining contact with clients, maintaining an own website, administration) the Hungarian SMEs mostly use the internet to seek information. Among larger companies, among those that have foreign ownership, and among those of the commerce and manufacturing sector internet usage is more prevalent than in the case of other types of companies. 84 percent of the SMEs have an own website and these are mainly maintained by a professional. A clear evidence of the importance of internet usage among domestic companies is that 90 percent of them claim that if the internet did not work at their company for a week, it would mean a serious problem for the functioning of their businesses. At the same time however, most of the responding companies invest less than 1 percent of their income in purchasing and maintaining IT devices.

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2 of February, 2017Research
Business perception of labor shortage in Hungary

In its analysis the Institute for Economic and Enterprise Research (IEER) examined the perception of labor shortage among Hungarian companies. The analysis is based on the data of the October 2016 Business Climate Survey of 3185 companies among which 2980 answered questions related to recruiting difficulties, and labor and skill shortage. The analysis also covers how recruiting difficulties and expected investments, stock orders, and plans of salary increase are related. The results show that a growing number of Hungarian companies consider recruiting difficulties and labor shortage as an obstacle to business activity and two thirds of them expect that the problems related to this are going to worsen in 2017. The most prevalent problem mentioned by the companies is the recruitment of senior employees. Plans of salary increase and recruiting difficulties are positively related showing that salary increase is a possible way of adaptation to labor shortage among the Hungarian companies.

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20 of June, 2016Research
The use of fringe benefits among Hungarian companies

In its ongoing analysis of Hungarian companies, the Institute for Economic and Enterprise Research (IEER) examined the practices relating to the use of fringe benefits among domestic enterprises. The analysis is based on the data of the April 2016 Business Climate survey of 1,771 domestic enterprises employing at least one person; they were questioned in relation to the non-wage benefits they provide. The results show that 55% of companies with a minimum of one employee provided at least one form of fringe benefits in 2016, the most popular non-wage benefits being considered were local travel allowances and the Erzsébet vouchers (food coupons, but sometimes used for non-food purchases). The use of fringe benefits is associated with a company's size, the economic sector it operates in, and its level of foreign ownership, as well as a firm’s business situation: the highest proportion of those that provide fringe benefits are typically medium and large sized companies, those that are foreign-owned, firms operating in the manufacturing sector, and those in a good business situation. For 83% of responding companies, the amount allocated to fringe benefits has not changed over the past year, while for 7% it declined compared to the previous year, and 11% reported that it increased. Those raising fringe benefits were characteristically those in a good business situation and those companies that lifted wages in 2015. Overall, domestic enterprises consider the role of fringe benefits as having a medium effect when making their company attractive to employees.

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14 of June, 2016Research
Late payments and debt queues among Hungarian companies

A recent analysis from the Institute for Economic and Enterprise Research (IEER) of the Hungarian Chamber of Commerce and Industry (HCCI) examined the experiences of late payment and debt queues of domestic enterprises. The results are based on data from the IEER January 2016 Quarterly Business Climate Survey during which we asked 400 domestic enterprises about the topic. The results show that 81% of businesses had at least one business partner that paid late in 2015, while 45% of respondents themselves owed to their suppliers at least once in the period under review. The highest proportion of late payments was among small businesses and the construction sector. From the combined results of the last few years, though, it appears that the situation of companies in terms of late payments has improved: the number of business partners paying late has declined on average as well as the amounts outstanding. The proportion of companies that could not pay their suppliers on time at least once because of a late payment by their customers is also in decline, as well as, compared to previous years, the proportion of respondents who feel that the debt queue problem is worsening.

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3 of February, 2016Research
Plans for wage rises in the private sector, 2016

In the course of its latest business climate survey HCCI Institute for Economic and Enterprise Research (IEER) examined potential changes in wages in the year 2016. According to our estimation enterprises plan raising gross salaries by 3.0-3.2%. This is an average wage growth, which slightly exceeds last year’s increase.

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9 of December, 2015Research
Internet usage of Hungarian firms

In our following brief analysis we examine for what purposes domestic enterprises generally use the internet. Our analysis is based on data from the business climate survey conducted by the Institute for Economic and Enterprise Research (IEER) in October 2015.

The data show that the highest proportion of firms surveyed use the internet for administration (e.g. the Hungarian version of an electronic civil service portal called “Ugyfelkapu” or “Client Gateway”), email correspondence with customers, and to follow market trends. Just over half of the analyzed companies have their own website, which is explained by the large number of micro businesses employing fewer than 10 people. The computer systems themselves along with the security of the stored information and the modern state of the technology were all regarded to be very important by the companies.

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22 of September, 2015Research
Online articles on debt queues – frequency and context

In our analysis we examine articles dealing with the subject of debt queues and how they changed over time as well as their context. The data used is derived from the online content analysis software Textplore ( developed by IEER. In our database there are 607 articles from 2002 or later which contains at least one of the terms ("debt queue", "debt circle" or "late payment") and appears in one of the following portals:,,,,,,,

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20 of April, 2015Research
Results of the IEER SME Outlook (Quarterly 2013-2014) regarding the effect of Funding for Growth Scheme on investment activity of the SME sector

Within the framework of the SME Outlook research, since January 2005 the HCCI Institute for Economic and Enterprise Research (IEER) conducts a quarterly analysis of the situation of small and medium sized enterprises, their short-term prospects, as well as the economic and institutional factors affecting this business group. For this project a total of 300 companies operating within the fields of manufacturing, construction and services are surveyed and the data is analysed in every quarter. The structure of the sample remains the same from quarter to quarter, with the companies surveyed representing the economic performance and sector distribution of small and medium sized enterprises in Hungary.

On June 1, 2013, the National Bank of Hungary (NBH) announced the Funding for Growth Scheme (FGS; in Hungarian: Növekedési Hitelprogram - NHP), the aim of the program was to support small and medium-sized enterprises in accessing forint- denominated loans, to strengthen financial stability, and to reduce external vulnerability of the Hungarian economy. The FGS consists of three pillars. Under the fist pillar the NBH provided collateralized refinancing loans to its monetary policy counterparties up to a total amount of HUF 425 billion. Under the second pillar the NBH provided refinancing loans to convert foreign currency loans of small and medium-sized enterprises into forint loans up to a total amount of HUF 325 billion. (Under the third pillar the NBH helped credit institutions to reduce their external foreign currency liabilities via FX swaps).

In this report we present the results of four SME Outlook quarterly surveys (October 2013, January 2014, April 2014 and October 2014), which covers in totally 1505 small and medium sized enterprises. In those quarterly SME Outlook surveys the leaders of small and medium-sized enterprises were asked about bank loans and the FGS by the HCCI Institute for Economic and Enterprise Research (IEER).

The results show that nearly 60% of small and medium-sized enterprises had some form of bank loan. The most common type of credits was working capital loan (including bank loans) during each survey period. Results show that companies that export a maximum of 50% of their whole production were the most likely to have a loan, as well as companies with expectation of investment change.

During the four waves of the survey companies hold mostly forint-denominated loans and around 30% of companies had a euro-based loan. Euro-based loan was mainly used by export-oriented companies, manufacture sector companies and medium-sized companies.

Generally every fifth SME applied for loan under the FGS. Over all periods of the survey, investment loans and working capital loans were the most demanded. More and more companies with positive opinion about current business situation were willing to apply for loan under the FGS, while companies with negative opinion were less likely to do so.

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