Two sub-indices of the household prosperity index fell and two improved compared to the previous month, and, overall, the index improved slightly compared to July. Employment continues to be the most positively assessed, with a change from -4.8 in the previous month to -3.2. Households are most negative about inflationary developments, but this index has been on a steady upward trend since January, rising from -84.3 in July to -85.3 in August, reflecting the declining inflation outlook. The perception of the economic environment deteriorated from -29.4 in the previous month to -30.3, while that of the financial situation went from -21.1 to -18.9.
For households, the biggest positive shift in August was in the length of time spent at work. The share of those working more than 30 hours a week but less than 45 hours a week has increased significantly (from 49.9% to 56.4%). Meanwhile, the percentage of those working 30 hours or less fell more significantly, by 3.5 percentage points, from 9.9% to 6.4%, and the percentage of those working more than 45 hours fell by a smaller 2.5 percentage points, from 39.0% to 36.5%.
Households’ prediction that it will take longer for a respondent to find a new job if he or she loses his or her job can be seen as a negative shift. In August, 21.7% of respondents expected to find a job immediately (an increase of 0.7 percentage points), while a further 34.6% (down from 36.5% in July) expected to find a new job within 3 months. 16.8% responded 3-6 months, down 1.8 percentage points from a month earlier. Compared with July, 7.8% (0.8 percentage points more) expected to find a new job between 6 months and 1 year, and 8.2% (1.8 percentage points more) expected to find a new job within more than 1 year.
The business survey showed a deterioration in all four sub-indices. The economic environment indicator fell more significantly from -29.2 in the previous month to -34.7, the business environment indicator fell from -25.2 to -29.3 and the industrial environment indicator from -11.4 to -15.6, while the production environment fell less sharply, from -11.1 to -13.0.
For businesses, the biggest negative change of opinion was expressed on Hungary’s competitiveness over the past year. Business leaders predict that there is a shift towards a perception of weaker competitiveness. In August, 29.1% (3.1 percentage points more) of companies perceived the category “significantly worsened”, while 28.9% (2.5 percentage points more) perceived the category “slightly worsened”. The shift is explained by the decreasing proportions of the “unchanged” category, 22.7% (-1.5 percentage points), the “slightly improved” category, 10.7% (-4.2 percentage points), and the “significantly improved category”, 2.0% (-1.2 percentage points).
The most positive change for businesses has come from business investment in the last 1 year. After 30.8% in July, 32.8% of the companies surveyed in August said they had invested in the past year, up 2 percentage points from July.
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.
