Good news for home buyers – price increases might slow down in Hungary
There is a remaining optimism in construction, based on the sector’s sentiment index in October. Expectations of structural engineering companies improved further, whereas expectations of civil engineering declined slightly compared to September, napi.hu reports. Results of GKI’s most recent survey reveal that intentions to raise prices declined as well, which is good news for home buyers.
In order to calculate its business confidence index, GKI surveys the expectations of the industry, trade, construction, services and households. In October, the construction sentiment index reached another peak. Compared to data from September, expectations of structural engineering companies improved further, while expectations of civil engineering companies somewhat declined. GKI’s economic sentiment index reached a peak in September.
Intention to raise prices
Based on seasonally adjusted data, intentions to raise prices weakened in construction in October. Only 23% of the responding companies reported planning to raise prices and 2% reported planning to lower prices. The ratio in September was 32% and 1%. Last year, the same ratio was 11% and 10%.
Assessment of production
Based on seasonally adjusted data, the assessment of production declined in the last three-months, but the commercial confidence index still seems to stagnate.
Seasonally unadjusted data also suggests a slight decay in production.
In October, the ratio between companies reporting increasing and decreasing production was 24% to 9%, while in September, this ratio was 24% to 5%. In construction, shortage of labour seems to be the main obstacle to production growth.
Assessment of the stock of orders
Compared to the decline in September, assessment of the stock of orders slightly improved, and it got close to its peak in August, based on seasonally adjusted data. Seasonally unadjusted data also suggests a slight improvement: 31% of responding companies reported high stock of orders and 13% observed a lower stock of orders.
Seasonally adjusted data suggests that in October, employment expectations strengthened significantly in construction compared to September. However, raw data shows a negative change. Within the next three months, 19 % of responding companies plan staff reinforcement and only 7% plan downsizing. In September, this ratio was 24% to 5%. Employment expectations improved in structural engineering whereas expectations worsened in civil engineering. There is a significant improvement compared to last year’s data, when only 7% of responding companies reported to plan staff reinforcement and 19% reported to plan downsizing.
The responding construction companies were somewhat pessimistic regarding the assessment of the Hungarian economy’s short-term prospects, and this index reached its lowest point in six months.