Economic uncertainties undermined business sentiment in June

Economic uncertainties undermined business sentiment in June

According to the June 2023 survey of Századvég Konjunktúrakutató, the sense of prosperity among households and businesses has deteriorated. The household index, measured on a scale of -100 to +100, fell slightly, from -17.9 to -19.4, while the business index fell more sharply, from -10.4 to -16.4. The prosperity index remained in negative territory, driven by the Russian–Ukrainian war, a higher inflationary environment and uncertainty caused by economic sanctions. Less turbulence and falling prices in financial, foreign exchange and commodity markets than in previous periods, as well as a stronger forint exchange rate, have all reduced uncertainty to some extent. A stronger improvement in the sense of prosperity will only be possible if the war ends, inflation falls sharply from its peak, and energy prices remain durably low.


All four sub-indices of the household prosperity index fell slightly compared to the previous month, and, overall, the index deteriorated slightly compared to May. Employment continues to be the most positively assessed, changing, however, from 0.5 in the previous month to -0.7. Households are most negative about inflationary developments, with this indicator weakening from -85.5 to -86.9. The perception of the economic environment deteriorated from -24.1 in the previous month to -26.7, while that of the financial situation went from -16.5 to -17.5.


For households, the biggest positive shift was in the length of time it takes to find a new job following a possible job loss. A quarter of the respondents believe they would find a new job straight away, which is only 1.7 percentage points lower than last month. However, significantly more respondents (36.2% in total, +3.5 percentage points compared to the previous month) predict that they would be able to find a new job within 3 months. Those who think they would find a new job in 3-6 months account for 19.1% of respondents (+1.7 percentage points), while 7% (+0.1 percentage points) say they would find a job in 6-12 months. Finally, 5.7% of respondents, 3.7 percentage points less than last month, said they were more likely to need more than 1 year to find a new job.

Overall, respondents estimated that the average time they would need to look for a new job was 3.3 months (0.55 months shorter than the previous month).


The business survey showed a deterioration in all four sub-indices from the previous month. The economic environment indicator deteriorated from -17.8 in the previous month to -28.9, the industrial environment indicator deteriorated from -8.2 to -13.9, the production environment indicator deteriorated from -7.3 to -11.2 and the business environment indicator deteriorated from -17.9 to -25.6.


For businesses, the biggest negative change of opinion was about the expected development of Hungary’s economy in the next year. 20.2% of respondents (8.2 percentage points more than in the previous month’s survey) felt that it was significantly deteriorating, while 30.0% (5.3 percentage points more than in the previous month’s survey) felt that it was slightly deteriorating.

For businesses, the biggest positive change was in the change in business selling prices over the next 1 year, which is also good news for the biggest problem, which is keeping inflation in check. From 45.0% in the previous month, 51.6% of businesses now expect sales prices to fall or stagnate.

About the prosperity index

The purpose of the prosperity survey conducted by Századvég Konjunktúrakutató is to provide information to decision-makers and analysts on current and near-term economic developments. Since August 2019, our Institute has been producing the business and consumer prosperity index on a monthly basis. Our monthly survey asks 1,000 business leaders and 1,000 adult residents about their assessment of the economic situation and their expectations. For the two groups, we ask 29 and 28 questions respectively, covering a wide range of economic life. Among the responses received, positive ones (e.g. expected economic improvement) are given a positive score, while negative ones (expected decrease in employment) are given a negative score. The scores are then averaged and converted to a scale between -100 and +100 to obtain the prosperity indices. Thus, the higher the value of the prosperity indices, the more positive households’ and companies’ perception of the economy is. In addition, for both the household and the business survey, 4 sub-indices are constructed using a subset of the questions to illustrate the evolution of economic sentiment in a particular area.

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