In this analysis the behaviour of Hungarian enterprises is investigated regarding their investments and loans. In 2013 the volume of investments stated to grow in Hungary after a prolonged period of decrease. The most important problems the companies have to face are the unstable regulation, the high funding costs, the lack of demand and the difficulties of getting a loan.

The survey In July 2014 showed that in Hungary the level of business confidence improved further compared to that seen in the previous quarter, thus we have three consecutive quarters in which growing business confidence was detected. The GVI Quarterly Business Climate Indicator for April rose 9 points to 18 points, also with three consecutive quarters of increases. This 18 points is the highest value recorded since the beginning of the current research (2010), and the last time the index was at a similar level was in early 2011 (in January 2011 it reached 16 points). The Uncertainty Index stood at a level of 35 points, one point below the value in April; this refers to stagnation in uncertainty following a sharp rise at the beginning of the year. The current level is below the 36-point level from two years earlier (in July 2013 it was 37 points; in July 2012 it was 42 points). The uncertainty index value indicates that the current trend does not uniformly affect the business community and will continue to affect only one part of the economy; others have not yet been affected.

Results of the IEER Business Climate Survey – April 2014

In 2012, there was a greater economic downturn than expected in Hungary (-1.8%) as the gap between the actual level of production and its level before the crisis got deeper again. The biggest drop occurred in the last quarter of 2012 (-2.5% compared to the same period last year, according to seasonally and calendar-adjusted, balanced data). However, according to the currently available data of GDP in the last year reports that the recession is not deepening further and the Hungarian economy is leaving its lowest point. According to the new results of the IEER Business Climate Index a further positive changes can be expected. The IEER Business Climate Index rose to +30 points in April 2014 from +23 points in October 2013.

Rather sectorial benefits

The HCCI Institute for Economic and Enterprise Research conducted a survey in 2013 to size up how the Hungarian enterprises conceive the proposed free-trade agreement between the USA and the European Union. A significant part of the respondents think that the emergence of the agreement will less affect their own companies, however it will have more positive effects on the economic sector they operate in.

The research program "Vocational schools" by IEER conducted since 2008 includes two main parts. The aim of the company survey is to map the demand of specific segments in the business sector for vocational school graduates within one year and beyond a three-year time span.
The survey on graduates examines the beginning of the working life of those young people who obtained their qualifications in vocational schools or trade schools 19 months before. The research has a focus point on whether these young people were able or willing to enter the labour market during the 19 months after their graduation.

The results of the latest SME Outlook survey reveal more favourable expectations compared to the previous quarter: the SME Outlook Business Climate Index increased from 2 points to 9 points, surpassing the level of January 2013 (7 points). The value of the SME Outlook Uncertainty Index compared to the previous quarter is similar, it increased from 31 to 33 points. These values are notably lower than we found earlier in the course of the SME Outlook Business Climate Survey. This result implies that there is a decrease in the diversity of opinions on views toward the current and expected business situation of enterprises, however the perceptions of the trends are still not clear or uniform within the SMEs.

The results of the latest quarterly business climate survey reveal more favourable expectations compared to the previous quarter: the IEER Quarterly Business Climate Index increased from 5 points to 8 points, what is close to the level of January 2013 (9 points). The value of the Uncertainty Index compared to the previous quarter is similar, it increased from 31 to 32 points. These values are notably lower than we found earlier in the course of the IEER Business Climate Survey. This result implies that there is a decrease in the diversity of opinions on views toward the current and expected business situation of enterprises, however the perceptions of the trends are still not clear or uniform within the business sector.

The newest wave of the joint research project by the National Labour Office and the HCCI Institute for Economic and Enterprise Research entitled “Short-term Labour Market Forecast” took place in September and October of 2013. During the survey managers of 7,108 companies were asked about current and expected labour demand. The results can be considered as representative both geographically and by economic sector, as well as by company size. The following is a short presentation of the results compared with other data sources and relevant estimates.

After three years a positive change can be seen in the subjective business situation assessment of companies – the index increased by five percentage points in a year. In the autumn of 2013 the rate of companies that were considered to be in a favourable business situation was 16 percent points higher than those who had a negative outlook. The business outlook for 2014 is more optimistic than at any time in recent years – the index is near 24 points. This optimism can be traced back to the expectations of the companies in the services sector, those within the areas of finance, and export-oriented companies.

In the third quarter of 2013 the small and medium enterprises show a positive image about their current business situation. All of the indicators referring to the current situation showed an increase compared to the previous period. In contrast, the expectations for the future indicate a negative outlook, as all of the forecasting indicators fell. These opposing effects resulted a decrease of the SME Business Climate Index. The Uncertainty Index also decreased comparing to the previous period, what means that the diversity of opinions among SMEs has reduced the on the previous quarter.

On the following link an English summary of the paper can be downloaded.

In 2012, there was a greater economic downturn than expected in Hungary (-1.8%) as the gap between the actual level of production and its level before the crisis got deeper again. The biggest drop occurred in the last quarter of 2012 (-2.5% compared to the same period last year, according to seasonally and calendar-adjusted, balanced data). However, according to the currently available data of GDP in this year (-0.5%, 0.1%) reports that the recession is not deepening further and the Hungarian economy is leaving its lowest point. According to the results of the business climate research of the IEER the a further strengthening of the positive changes can be expected. The IEER Business Climate Index rose to +23 points in October from +14 points in April.

On the following link the Hungarian paper with an English summary can be downloaded.