October 2012 was the thirtieth occasion of the IEER business climate survey which is based on the cumulative response of more than 14,000 companies conducted in April and October of each year with the participation of regional chambers. It is the largest and most extensive business climate survey in Hungary. The research is part of the 14 million enterprise-wide Eurochambres survey of the European economy. In October this year 3,182 firms filled out our questionnaire -- our study is based on the responses of these companies.

The results inform us of the worsening business prospects and expectations surrounding a high level of uncertainty felt by Hungarian companies. Based on the expectations of firms, stagnation and a worsening business climate are expected in late 2012 and early 2013 for the Hungarian economy. Although the IEER Business Climate Index remained in the positive territory, the value declined from +8.7 points in April to +1.9 points. The IEER Uncertainty Index has not changed significantly since April, and is still at a high level. The economic crisis has strongly affected all sectors, with the construction industry in particular still reeling from the impact of the economic crisis. This sector has so far not shown any signs of recovery.

Analysis within the framework of the IEER ad-hoc business climate research project shows the change in the propensity of emigration according to the frequency of internet search terms relating to foreign employment. Google Trends provides a system for retrieving time series data with the frequency of different search terms characterized by the Google search service. Our prior assumption is that the internet is a significant part of pre-migration enquiries and the Google search engine is used in this process, thus search volume carries relevant information for our calculation with regard to migration trends.

The results show that in general, the frequency of search terms for working abroad not related to a specific country peaked twice between January 2007 and September 2012, first in 2009 and then in January 2012, while in December 2010 it was at a minimum. The most popular search destinations were Austria, Germany and Great Britain during the period under review. In all three countries, 2012 showed an increased interest in employment opportunities; the search volume peaked in January of this year. Employment in Austria was of interest to those mostly in the western part of Hungary, while for Germany the same can be said for those living in the counties of Komárom-Esztergom and Tolna. For job opportunities in England the north-eastern part of the country showed the greatest interest for the period under review. The data shows that – with the exception of Austria – Hungarians very rarely look for work in neighbouring countries.

In January 2005 the Figyelő, the IEER and the Volksbank launched a joint research examining the business situation and short-term prospects of small and medium enterprises (SMEs) along with an assessment of the economic and institutional aspects affecting this business group. In this study, a total of 300 companies from the manufacturing, construction and services sectors are consulted on a quarterly basis and the results are analyzed subsequently. The structure of the sample remains the same from quarter to quarter and the companies surveyed represent the small and medium-sized firms of Hungary by economic performance and sector distribution.

The second quarter of 2012 witnessed a slight increase in the values for the current business situation indicators of small and medium enterprises, however they remained below the results experienced over the past year. Future expectations have changed in the opposite direction over the past three months: of all indices only investment activity increased over the previous quarter, all other indicators declined. Overall, stagnation can be observed in the value of the SME Business Climate Index in July 2012, which is significantly lower than the level measured for the same period of last year. Following an increase of the Uncertainty Index in the previous quarter, in the second quarter of 2012 it declined again, which means the differences of opinions over the current and future business prospects lessened among the small and medium-sized enterprises.

Within the framework of the ad hoc business climate research program started by IEER, we examined the estimation possibilities of the unemployment situation in Hungary by Google Insights for Search (GIS) application. In Hungary the Hungarian Central Statistical Office discloses data on unemployment on a quaterly basis and are published in the middle of the quarter that follows the relevant quarter. It would be useful to achieve results earlier on the unemployment level experienced during each quarter. GIS would be the solution for this since it is capable to demonstrate the keywords and the number of Google searches in time and field breakdown. The esteemability of unemployment is backed by the assumption that job search is done partly through the internet. In the research program all our keywords were in connection with job search. Besides, we examined two indices related to the labour force market: one on the unemployment data, the other on the number of registered job seekers. The outcome of these models – compared with our basic model – show that we can achieve a lot better one if we do utilize the information acquired on the search activity. Accordingly, in the unemployment estimation process the models estimated by GIS data reached a better goodness-of-fit than the other type of models.

Within the framework of the research program on vocational schools started by the Hungarian Chamber of Commerce and Industry and IEER in 2008, we explore on an annual basis the corporate demand for, and labour market situation of, skilled graduates, the employment opportunities available, as well as views about their vocation and jobs. The fourth such student survey was carried out in 2012 which was done using a questionnaire survey of 1,872 students. Based on data from this year's research, the career beginnings on the labour market of trade school or vocational education graduates from the summer of 2011 – that is, youths who acquired a profession – is examined. The analysis seeks to discover, above all, that nine months after acquiring their qualifications were these graduates able to – or inclined to – enter the labour market, as well as were they able to find employment within their profession. The study was limited to a number of skills that were subsidized in several regions of Hungary as well as professions involved in the research from previous years.

The following study, prepared under the auspices of the IEER ad-hoc business climate research project, proposes to answer the question of how economic processes can affect the appearance of this topic in the mass media. In our research, we examined whether the 2008-09 economic crisis changed the way in which Hungarian journalists used terms, employed new terms in the daily press, or went through a learning process which revealed a more informed and attentive form of journalism regarding economic processes and their relationships.

The results show that the economic crisis changed the vocabulary in use by Hungarian online media: during the crisis and the years since, economic subjects received more attention than before 2008. Terms related to economic policy, corporate topics, and the financial crisis increased significantly, while in the case of the foreign trade word group, this change was negative. Along these lines, it can be said that the economic crisis represented a real break point regarding the occurrence of economic issues in the media.

One aspect of the IEER ad hoc business climate research project is an attempt to examine the applicability of Google Insights for Search to study household consumption, the progress of retail sales turnover, and current car sales trends in Hungary. There have been several successful attempts to use Google data in a similar fashion, usually in connection with U.S. economic indicators. Our goal, however, is to analyse the consumption indicators based on Internet search traffic in a country where Internet penetration lags behind U.S. and Western European levels.

Our results show that Google can also be a useful tool for estimating present consumption patterns in a country where Internet use is less prevalent compared to developed countries. For retail and car sales, as well as household consumption, we found that the indicators based on Google performed well in providing trend estimates for the given reference time series.

In January 2005 the Figyelő, the MKIK Economic and Business Research Institute (IEER), and the Volksbank jointly launched research into the business situation of small and medium sized enterprises, along with an investigation into their short term expectations as well as an assessment of the economic and institutional factors affecting their business situation. Our analysis is based on the quarterly survey results of a total of 300 companies operating within the manufacturing, construction and services sectors. The structure from quarter to quarter remains the same and is representative of the economic performance and sector distribution of companies operating in Hungary.

The latest results show that almost one-third of business partners from the small and medium sized enterprises surveyed regularly paid late: in January 2012 the average rate of partners paying late compared to the previous six months was 32%, that is, this rate has declined since July 2011. The full value of late payments comes out to be 33% of total sales, so overall we can say that the breadth and depth of late payments at the beginning of 2012 was less than that of the previous half year.

We found that there was a significant increase in the past year of those small and medium enterprises negatively affected by the economic crisis. While in January 2012 34% of companies felt that the crisis will have a major or at least significant effect on their business situation over the next six months, in January 2011 23% of SMEs felt this way, whereas two years ago this was 27%; in other words, the impact of the economic crisis among businesses has once again increased.

Based on the responses of firms in 2011 the gross wages paid to employees increased by an average of 3.8%. Taking into account the 3.9% annual inflation rate from the Central Statistical Office (KSH) for the year 2011, the real wages of employees within the SME sector fell minimally last year. According to our recent survey results CEOs are planning to increase gross wages in 2012 by an average of 5.7%.

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.

Since 2005 the Institute for Economic and Enterprise Research (IEER) has undertaken the "young graduates in the private sector" research program which prepares an annual survey of Hungarian enterprises on the current and future employment characteristics of young graduates, employment trends, and the difficulties they face, including their salaries and their competencies, as well as the popularity and prestige of higher education institutions. In 2011 we approached 1,313 businesses. Of the total number of companies surveyed 30 percent have 50 or fewer employees, 19 percent employ between 50 to 100 people, and 24 percent have between 100-250 employees.

The latest results show that more companies still prefer to recruit graduates as opposed to those thinking about downsizing; also, the number of graduates for hire is more than those affected by proposed redundancies, therefore we can say that Hungary doesn’t have an oversupply of graduates. Companies with 20 or more employees make use of more than 95 percent of graduates, and also employ 42 percent of fresh graduates. The 2011 results suggest that in 2012 a significant increase is expected in the demand for the qualifications of an engineer, such as electrical, mechanical, construction or manufacturing technology engineers. Those least in demand are those who work in tourism, finance, and logistics while graduates in jobs that don’t require specific knowledge and general assistant jobs can expect a short-term decline in demand. According to the GVI prestige rankings, in terms of those offering economic courses the Faculty of Economics and the Faculty of Management Science at Corvinus University are in first place, whereas for technical courses the Faculty of Mechanical Engineering and the Faculty of Electrical Engineering and Information Technology at the Budapest Technical and Economics University hold the top two places.