The latest wave of the IEER Business Climate Survey is based on the responses of 3,274 enterprises. According to the findings, the Business Climate Index was at 53 points as of April 2018. This score has been the highest since 1998, the year when surveying began.

Companies still see business climate as favourable. The improving tendency of the previous year seems to be continuing. For most part this can be put down to the fact that expectations for unfilled orders have become much higher. Business climate outlook has also improved slightly.

Uncertainty index dropped 3 points below the October value to 39. This might mean that the optimism of Hungarian businesses has become more uniform compared to previous year’s data.

In our analysis we shall present company participation in public procurement tenders, featuring the most active corporate circles and specialisation fields. We shall also consider the information sources on which the companies relied to obtain details about current public procurement tenders. We used January 2018 data from HCCI IEER quarterly Business Climate Survey, which is based on the answers of 400 CEOs leading Hungarian companies.

The quarterly corporate business climate survey of Institute for Economic and Enterprise Research (IEER) is based on the opinions of 400 chief executives about the current state and outlook of their businesses. From the companies surveyed, 300 small and medium-sized enterprises (with 20-249 employees) were selected to calculate the Comprehensive SME Business Climate Index and the Comprehensive SME Uncertainty Index. For the greater sample of 400, including large enterprises employing over 249 people, a Quarterly Business Climate Index and a Quarterly Uncertainty Index were calculated.

The results of the latest IEER SME Outlook business climate survey reveal that the business confidence significantly increased compared to the previous quarter: the Business Climate Index rose from 18 to 24 points. Thus, the decreasing tendency that started in January 2017 has been broken.

The IEER analysis examines the plans for higher education of students from the best high schools in Budapest, Pest and Győr-Moson-Sopron Counties. The results show that every tenth student out of all the students of the best high schools submits their application to a foreign higher educational institution. Most of these students plan to reside in their chosen city not only for the duration of their higher education, but for a longer term.

Contents:

• Corporate reactions to the raise of the minimum wage and the guaranteed minimum wage

• Characteristics of the Russian economy

• International trends

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.

The results of the latest quarterly business climate survey reveal less favourable economic conditions compared to the previous quarter: the IEER Quarterly Business Climate decreased from 31 to 21 points. It means that the enterprises detect a turning point: we received at least 30 points in each quarter since January 2016, 21 points were measured for the last time in July 2015. (The Business Climate Index was 33 points in the same period of the previous year.)

This decline is mainly due to the fact that businesses are evaluating the current profitability, stock order, business situation, and past six-month production levels more negatively than in January. In addition, expectations on the development of investments have become more pessimistic.

The Uncertainty Index is at a current level of 35 points, which is slightly lower than in the previous quarter (it was 36 points in January 2017). The value of the Uncertainty Index indicates that the current trend is not uniform within the private sector, and that it will continue to be confined to one part of the economy and will not be felt by all companies.

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.

The following summary comprises the latest results gained from the largest representative survey series on the Hungarian labour market. During the study 6835 company leaders’ answers on employment, on the company’s business situation, and on the company’s future expectations were registered and analyzed. The history of the survey series targeting short-term expectations of the labour market goes back to the years following the regime change of 1989-90 in Hungary. The latest survey in this research program took place between September 7 and October 14, 2016 as the ninth occasion of the collaboration between the Hungarian Ministry for National Economy and the Institute for Economic and Enterprise Research (IEER) to forecast the short-term economic prospects of the private sector, and to review corporations’ labour market decisions in an empirical study.