According to the survey conducted by GKI Economic Research Co. – supported by the EU – in October, both the business sector and consumers expressed slightly more optimistic expectations than in September. The summary indicator of expectations, the GKI Economic Sentiment Index, rose by just over 1 point, reaching a thirteen-month high. Companies’ willingness to employ improved slightly, while the aggregated expectations regarding the likely development of sales prices remained unchanged compared to the previous month. The predictability of the economic environment became noticeably more favorable.
October marked the third consecutive month in which the GKI Business Confidence Index increased compared to the previous month, bringing its value to a thirteen-month high. Although the industrial and construction confidence indices changed only slightly compared to September, the trade index rose by 3 points, and the service sector index by 2 points. The industrial index has not been this high for sixteen months, the trade index for thirteen months, and the service sector index for twelve months. Looking ahead, the construction sector remains the least optimistic, while business services continue to be the most optimistic sector.
The employment indicator, reflecting companies’ overall staffing expectations, improved slightly compared to the previous survey. Over the next three months, 7% of companies plan to expand their workforce, while 12% intend to reduce it. The most optimistic sector is business services, where the proportion of those planning to increase staff slightly exceeds that of those preparing for layoffs.
In October, the predictability of the economic environment improved noticeably across all sectors. Industrial and construction companies are the most affected by the lack of predictability, while trading and service companies are less concerned.
The price indicator, which reflects companies’ expected changes in sales prices over the next three months, remained unchanged in October compared to the previous survey, following August and September. Over the next three months, 19% of companies plan to raise prices, while 8% intend to lower them.
The GKI Consumer Confidence Index in October was slightly higher, by just over 1 point, than in September, reaching a fourteen-month high. The assessment of the financial situation over the past 12 months changed little, but the financial outlook for the next 12 months improved noticeably compared to September. The evaluation of the country’s expected economic situation over the next 12 months remained unchanged. The perception of disposable income for spending on high-value consumer goods became more favorable than the previous month. Inflation expectations among the population decreased, while the outlook regarding the expected number of unemployed improved compared to the ninth month of the year.
The data for the charts can be found in the attached Excel file.
METHODOLOGICAL EXPLANATION:
GKI Economic Research Co. – in accordance with the methodology of the European Commission – takes into account the expectations of the business sector and the population (i.e., consumers) when calculating its economic sentiment index: the index is the weighted average of the Consumer Confidence Index and the Business Confidence Index.
The GKI Business Confidence Index is the weighted average of the industrial, trade, construction, and service confidence indices. The employment indicator reflects the difference between the proportion of companies planning to increase and those planning to reduce their workforce over the next three months. The price indicator reflects the difference between the proportion of companies planning to raise and those planning to lower sales prices over the next three months.
The GKI Consumer Confidence Index is calculated as the arithmetic mean of balance indicators derived from responses to questions regarding households’ assessment of their financial situation over the past 12 months, financial expectations for the next 12 months, expected development of the country’s economic situation, and prospects for purchasing durable consumer goods.
GKI publishes seasonally adjusted data, meaning it filters out deviations caused by seasonal effects – for example, higher demand before Christmas or lower production during summer holidays – using appropriate mathematical methods.
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