German companies’ outlook for the Hungarian economy is deteriorating

Around 72% of German companies operating in Hungary reported a deteriorating outlook for the local economy over the next 12 months in a biannual survey conducted by the German-Hungarian Chamber of Commerce and Industry (DUIHK).

Only 5% of companies see the economic situation improving, according to the survey.

The difference between pessimistic companies and those with a positive outlook widened to 67 percentage points from 51 in the spring survey.

About 51% of companies see their own business situation deteriorate, well beyond the 19% ratio in the spring. Concerns were strongest in the retail sector, where 72% of businesses report a slowdown in activity.

About half of companies plan to cut capital spending, but only 15% anticipate layoffs in a tight labor market.

About 78% of companies said rising energy prices are the biggest risk to businesses and 57% reported falling demand.

The survey of 107 companies was conducted between October 4 and October 21.

DUIHK President András Sávos noted that the 3,000 German companies in Hungary employ 220,000 to 250,000 people and generate a sixth of the added value in the business sector.


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