January 2012 was the ninth occasion of the IEER quarterly business climate survey. In this analysis, on a quarterly basis, we engaged in a total of 400 firms in the manufacturing, construction, and service industries being representative of the economic performance and sector distribution of companies operating in Hungary.

The January 2012 survey showed that all the business climate indicators related to the current state of business of Hungarian firms fell in the last quarter of 2011, following a less favourable macroeconomic situation. The short-term expectations of companies, however, show a significant positive change: with the exception of expected investment activity, all indicators rose for the next half year. As a result, the quarterly GVI Business Climate Index increased in the last quarter 2011, while the Uncertainty Index declined compared to the previous quarter.

A somewhat more favourable expected business situation for the next six months was observed compared to the previous quarter: 26% of firms count on a good business situation, while 17% say it will be bad. Expected production level indicators for the next half year were higher than the previous quarter. As for employee numbers over the next half year, businesses can count on the positive trends observed in the previous quarter to continue, especially among companies producing for the domestic market. As for investment activity, the data points to a decline as being likely in the coming months among businesses operating within Hungary.