K&H: breakthrough missed: sentiment among large companies is down again

By: Trademagazin Date: 2025. 07. 28. 12:23

The K&H Large Company Growth Index, which gives an idea of the economic outlook and expectations of domestic large companies, has once again approached the level measured at the end of last year, with a 4-point decrease and currently stands at -6 points. This is a significant drop, especially in relation to the fact that the mood of company managers has continuously improved in the past two measurement cycles, and in the first quarter, the zero point came within reach again, or even a turn into the positive range. The decrease was mainly caused by macroeconomic factors. Large companies are counting on deteriorating revenue prospects, along with declining profits, meaning that they are currently forecasting a less successful 12 months than in the past two quarters.

Although for the first time in the past year and a half, the expectations of the managers of domestic large companies approached the neutral level, and there was a realistic chance of a turn into the positive range, in the end the breakthrough failed and the K&H Large Company Growth Index turned into a downward trajectory again. The main reason is that the sub-index encompassing macroeconomic factors has fallen again: its value has fallen from -17 to -25 points. The corporate sub-index encompassing the company’s own situation and microeconomic factors has also decreased, although in the positive range, currently standing at 1 point, which is a two-point decrease. The slowdown in domestic economic growth, in addition to the weak GDP data, did not improve the pessimistic mood of business leaders, therefore the total index indicator has decreased significantly, by 4 points: it currently stands at -6 points, which is very close to the level measured at the beginning of 2024.

“Large companies are not in an easy situation, and the current state of neither the international nor the domestic economy gives them reason to be optimistic. The runaway inflation, the increase in supplier prices, and the decline in investments by domestic customers have negatively affected them, as these are the factors that most influence the economy according to company managers. In terms of assessing the economic prospects of their own company, the proportion of those who expect a worsening situation has more than doubled compared to the previous quarter (26%), and those who expect stagnation has also decreased by 20 percentage points (52%). Despite this, a moderate increase of 5 percentage points can be seen among managers who see their economic situation more optimistically, with nearly every fourth manager currently thinking this way. This also shows that in the current chaotic economic situation it is difficult to properly assess what company managers should expect”

– said Tibor Bodor, head of the corporate division of K&H.