GKI's Consumer-business confidence in new historical low

Industrial companies' assessment of production and order stock worsened. But the evaluation of stocks of their own products improved. Plans for price changes were the same as in November, but fewer companies planned new hires.

Economic think tank GKI's
seasonally-adjusted combined consumer-business confidence index,
prepared with EU support, reached a historical low in December,
though the indicator fell at a slower pace than in November, GKI
said.

The combined consumer- business
confidence index dropped to -36.7 points in December from -33.3
points in November. In October, the index stood at -17%. The business
confidence index fell to -28.2 points in December from -25.1 points
in November. In December 2007 the index stood at -7 points. GKI's
measure of consumer confidence dropped to -60.8 points in December
from -56.7 points in November and -47.1 points in the same month a
year earlier.
Businesses' outlooks, especially in the
industrial and service sectors, worsened at a far slower pace in
December than in November, GKI said. The outlook in the construction
sector even improved slightly.
Trade companies' stock levels were
little changed in December. But the assessment of stock of orders and
market position worsened. Few trade companies planned to raise
prices. In the service sector, companies saw the chances for
generating more turnover and making new hires narrowing.
Companies in nearly all sectors said
the outlook for the Hungarian economy had worsened, though building
companies said their outlook for the economy was unchanged.
Hungarian companies see the global
economic crisis causing demand to fall and plan to cut costs as a
result. Three-fourths of industrial companies see sales possibilities
narrowing. Just 2% expect more business.
Different sectors plan to deal with the
crisis in different ways. Vehicle manufacturing, machinery and
woodworking companies plan the biggest layoffs; drug and chemicals
companies are putting off developments; many light industrial
companies are relying on innovation to help them through the period;
and makers of metal and plastic products could change their profiles.
Hungarian consumers said the outlook
for their financial situations had worsened in December. Inflation
expectations were little changed, and about the same number of
households said they could not make savings. At the same time,
households' assessment of their current financial situation improved
slightly and more said they planned big ticket purchases.