The sense of prosperity among both the population and companies further improved in February

The sense of prosperity among both the population and companies further improved in February

According to the February 2023 survey of Századvég Konjunktúrakutató, the sense of prosperity of both the population and businesses has increased. On a scale between -100 and +100, the value of prosperity index increased from -22.4 to -20.3 regarding households, while it increased from -16.4 to -13.0 regarding businesses. The sense of prosperity index remaining in the negative range is still determined by the higher inflation environment induced by the Russian-Ukrainian war and the uncertainty induced by the economic sanctions. Financial, foreign exchange, and commodity market turbulence, which was smaller than in the previous periods, have reduced uncertainty. At the same time, the sense of prosperity is possible to significantly improve when the war ends, inflation moderates significantly after peaking, the great uncertainty in the energy markets is eliminated, and sustained low prices develop. It should be noted that this month, the population’s expectations point in the direction of a lower inflation environment.


Three of the 4 sub-indices of the population’s sense of prosperity have improved compared to the value of last month, and overall, the index has also become more favourable compared to that of January. The most favourable is still the perception of the employment situation, the value of which has increased from last month’s -4.8 to -2.5. Households have the most negative perception of the inflation processes, the sub-index of which has slightly increased from -91.6 to -88.0. The perception of the economic environment has increased from the value of -31.6 to -27.1 compared to last month, while that of the financial situation has decreased from -17.9 to -18.1.


The biggest positive shift in the case of the population in February, as in January, occurred in the development of the forint-to-euro exchange rate over the next twelve months. 3.6 percentage points fewer people expect a significant deterioration, while 4.6 percentage points more people estimate a slight weakening. 0.9 percentage points more people forecast an unchanged situation, and 7.0 percentage points more people expect a slight strengthening. Furthermore, there is 0.6 percentage point more people who believe that the forint exchange rate against the euro will significantly strengthen.


Regarding the corporate survey, the value of all four sub-indices have become more favourable compared to the previous month. The index of the economic environment has improved from last month’s –33.0 to -23.9, that of the sectoral environment from -16.9 to -8.9, that of the production environment from -9.1 to -8.8, while that of the business environment from -26.3 to -21.0.


Companies expect the biggest improvement (in February compared to January) in terms of a change in the country’s economic situation over the next twelve months. On average, 23.7 percent of companies expect the Hungarian economic situation to improve slightly, while 2.6 percent expect it to change in a much better direction. The former is an improvement of 6.4 percentage points, while the latter is an improvement of 0.8 percentage point. The category of it will be slightly worse is projected by 1.8 percent fewer people, while the category of it will be much worse is projected by 10.8 percent fewer people for the coming year.

Overall, companies are most pessimistic about the development of their sales prices over the next twelve months. According to 11.2 percent of the companies surveyed (a decrease of 8.4 percentage points compared to last month), sales prices will increase significantly, while 46.8 percent (1.1 percentage points higher than the January rate) say they will slightly increase. A higher proportion of the companies (26.2 percent after the previous month’s 30.8 percent) marked the category of unchanged prices. Altogether, 5.6 percent of the companies surveyed expect a decrease, after 4.6 percent in the previous month. The answers to this question could be a precursor to the development of future inflation expectations.

In the results of the breakdown by sector in the company survey, it is important to point out that the sense of prosperity index of agricultural enterprises improved significantly, from -13.91 to -6.25. Meanwhile, the sense of prosperity index has changed from -11.57 to -10.1 regarding industrial companies, that of the construction industry has changed from -12.29 to -13.09, that of trade from -16.89 to -14.77, and that of services it has changed from -17.77 to -13.31. Thus, taking into account the data of the average sense of prosperity index (January: -16.4 and February: -13.0), it can be concluded that the average sense of prosperity of agricultural and industrial companies is below average, i.e., more favourable.

About the prosperity index

The task of the prosperity research conducted by 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 perception 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, the positive ones (e.g., expected improvement in the economic situation) receive positive scores, while the 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 households and companies perceive the processes in the economy. 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.

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