The industrial confidence index was deteriorating

In January the seasonally adjusted GKI Economic Sentiment Index declined a bit shows the survey of GKI Economic Research Co. supported by the European Union .

The
reason for this fall is mainly the rather adverse evaluation of
production and changes in stocks. Since the previous month, the
assessment on the perspectives of production and employment plans as
well as the stock of orders have not changed, but expectations on
export orders have deteriorated. On the other hand, companies noted
that the orders received in the past three months were growing, such
as their competitive position.
Results of the survey on
construction have not been changing for half a year now and they
refer to rather unfavorable general conditions of production.
Compared to December, the evaluation of the stock of orders and
future employment deteriorated, therefore, the industrial confidence
index deceased somewhat, but it has not reached the bottom of
November.
The confidence index of the trade sector dropped
notably after the temporary increase in December. In comparison with
the previous month, the projection of sales and orders deteriorated
significantly, whereas that of stocks fell somewhat less.
In
January, expectations in the trade sector became more pessimistic,
but fluctuation of the confidence index has been usual in this sector
for one and a half year and the current one can be considered close
to the average. Expectations on employment in the near future have
been improving, but the evaluation of the general state of business
over the past three months and on future turnover deteriorated.

Intentions to raise prices grew significantly in
industry–mainly in the chemical, baker and building material
industries–in construction and in trade–in trade this is
traditional in the beginning of the year–but at the same time they
remained unchanged in services. On the other hand, the inflationary
expectations of consumers decreased in January, just like in
December.

The opinion on the outlook for the Hungarian
economy worsened in the industry and the service sector, stagnated in
the trade sector and improved in the construction industry. The
opinion of the consumers improved significantly in December, and in
January became even somewhat better (though pessimists are still in
large majority).

The GKI consumer confidence index
deteriorated again in January, though only slightly. Compared to the
10-year negative record of last January, the index had been improving
moderately until mid-2007, then it fell back to the level January,
followed by a significant increase last December. At the beginning of
this year, household expectations concerning their own financial
position deteriorated slightly, but they still are higher than a year
ago. Compared to December, the assessment of consumers on their
short-time savings capabilities also deteriorated. The costs of
living are thought to be higher than before and the purchase of
expensive durables at higher values is also less preferred.