German companies in Hungary worried about growing costs, decreasing consumption
The latest survey conducted by the German-Hungarian Chamber of Industry and Commerce (DUIHK) shows worsening sentiment among companies.
Presenting the results of the biannual survey on Thursday, DUIHK communications director Dirk Wolfer said one in two companies indicated an unfavourable outlook for the Hungarian economy, and only one in ten augured improvement. The results show a “significant deterioration” compared to the survey in spring, he added.
One-third of the companies delivered a positive assessment of their own situations, although the rate reached 50pc among businesses in services, while the assessments of 19pc were negative.
More companies planned to cut, rather than raise, investment spending.
One-quarter plan to make new hires in the coming twelve months and 19pc plan to reduce headcount.
Around 73pc of companies said demand for the their products and services posed the biggest risk. Higher labour costs were a lesser challenge.
DUIHK chairman András Sávos noted that the survey of 262 companies had been conducted in October, before the US elections and the collapse of the German government.
According to hvg.hu, German companies in Hungary are especially worried because of the rule of law in Hungary, the rising costs and the low consumption of the Hungarians. Wages in Hungary grew by 66% between 2019 and 2024, which is a challenge for every company because their effectiveness did not increase by 66% in the past four years. Of course, the Hungarian workforce is still cheap. The hourly wage is EUR 13 compared to EUR 41-42 in Germany.
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Featured image: illustration