According to the survey of Századvég Konjunktúrakutató in December 2021, the sense of prosperity of households and businesses developed differently: While households were again characterised by an improving sense of prosperity, that of businesses slightly declined. The value of the prosperity index on a scale between -100 and +100, increased from -6.8 to -4.2 for the population, whereas it fell from -2.6 to -3.7 for companies. Interestingly, the perception of the economic environment was different: regarding businesses, it deteriorated for businesses and regarding households, it improved. Three of the four household sub-indices could improve compared to the previous month, i.e., the results clearly show that a further improvement in the sense of prosperity of households could be greatly helped by declining inflation.
The sense of prosperity of the population has started to grow again, while that of businesses has slightly decreased
Three sub-indices of the household prosperity index have improved, and one has decreased compared to last month. The perception of employment by households is still the most favourable, the sub-index of which has slightly increased from +4.6 to +6.2. The perception of the financial situation has become the most favourable, the value of this sub-index has changed to -3.8. The sub-index of the economic environment has increased from -9.1 to -5.9. The perception of inflation is still the most unfavourable, the index of which has decreased from -41.2 to -47.4, which has been the lowest value since the start of the survey, in line with the acceleration of inflation in recent months.
Household data clearly show the effect of the partial lifting of the moratoria of loan instalments, which also means an improvement in the financial situation, as the indebtedness of households has started to decline. While in November only 17.7 percent said their credit had declined in the past 12 months, in December this rate rose to 23.9 percent. Meanwhile, the share of households without loans fell from 66.5 percent to 64.9 percent, and the share of those with a credit growth fell from 12.0 percent to 9.8 percent.
Regarding inflation, not only the perception of past processes has become more unfavourable, but respondents also expect higher inflation for the next 12 months. The proportion of those who say inflation will be below 1 percent or between 1 and 2 percent in the next 12 months has barely changed, in December it was 1.0 percent and 8.0 percent, respectively. Inflation in the central bank’s target band, i.e., between 2 and 4 percent, is expected by 20.0 percent compared to 23.0 percent, while inflation between 4 and 5 percent is expected by 18.5 percent compared to 19.9 percent, and an even higher inflation is expected by 35.5 percent compared to 40.7 percent in the previous month.
In the corporate survey, the value of three sub-indices has deteriorated and that of one improved in December, compared to the previous months. There has been improvement in the sub-index of business environment, which has increased by 0.4 point, to -2.6. The perception of the industry environment remained the most favourable, with the indicator decreasing from +12.3 to +10.6. The perception of the economic environment and the industry environment is slightly negative: the former changed from -5.5 to -7.2, while the latter from -4.1 to -5.3.
For each question, the distribution of answers changed only slightly compared to the previous month. The biggest positive change is in the willingness to invest for the next 12 months. In December, 38.9 percent of respondents indicated (rather yes, probably yes or surely) that they would invest in the next 12 months. This rate was 36.4 percent in November. The rate of 38.9 percent in December is high: Since the launch of the questionnaire survey in August 2019, it was the highest, 43.2 percent in January 2020, and had fluctuated around 40 percent before that, i.e., the businesses’ willingness to invest is close to the pre-virus level.
From November to December, the biggest negative change occurred in relation to the current level of orders: While in November 21.4 percent of company executives surveyed reported low orders, in December this proportion increased to 27.0 percent. After 62.3 percent in the previous month, 55.6 percent of respondents said that their order book was at its usual level. The proportion of those with a high order book remained unchanged at 14.0 percent. Overall, the perception of the order book is more unfavourable than in recent months, roughly the same as in July, and more positive than in the spring.
About the prosperity index
The task of the prosperity research conducted by the Századvég Konjunktúrakutató Zrt. is to provide decision makers and analysts with information about the current and expected processes of the economy in the near future. Our institute has been compiling corporate and household prosperity indices on a monthly basis since August 2019. In our monthly survey, we ask 1,000 company executives and 1,000 adult residents about their assessment of the economic situation and their expectations thereof. Regarding the two groups, we ask 29 and 28 questions, respectively, which cover a wide range of economic life. Of the responses, positive ones (e.g., expected improvement in the economic situation) receive positive scores, while negative ones (expected decline in employment) receive negative scores. Then, by averaging the scores and converting them to a scale between -100 and +100, the prosperity indices are obtained. Thus, the higher the value of the prosperity indices, the more favourable the processes in the economy are for households and companies. In addition, regarding both household and corporate surveys, we also prepare 4 sub-indices for each by using some of the questions, which illustrate the development of economic well-being in an area.