Fading confidence in manufacturing

Based on the manufacturing sentiment survey of Kopint-Tárki both the evaluation of the current situation and the outlooks have been declined in the first quarter. This is in contradiction with statistical data that suggests significant increase in the production of the manufacturing industry. This caveat can be explained by the fact that the increase of production is mainly associated by larger companies. Small enterprises have not been connected to this upward business cycle and this is reinforced by some of the indicators. Companies with less than 10 employees (this group constitutes more than 80% of the Hungarian manufacturing industry) are feeling themself much worse than bigger firms. These differences can be observed in other indicators as well like stock of orders and production outlooks.

After a long time lack of demand became the most problematic factor for manufactoring industry instead of lack of skilled labour force. At the same time this situation most probably will not be permament. A worsening environment is connected to this mixed domestic situation. EU funding has just started although their sustainability is questionable. The preparation for the 2018 election can be felt and that makes the post-2018 period uncertain – this is also felt by the companies and also refelected in the country evaluations. This indicators declined a lot and it stays rather in the negative domain and there are no differences in that among the companies. At the same time these results can not be seen in the statistical data as growth is expected in all sub-branches of manufacturing.