Economic Analysis, Forecasts

Monthly Bulletin of Economic Trends | September 2019

Opportunities of job automatisation in Hungary

Increased automatisation and digitalisation is regarded today as one of the most important phenomena of labour market change. Research concerning possible impacts usually start out from the presumption that for some existing tasks, human power will be replaced by machines as a result of technological development, so in those fields the demand for labour will decrease. In other fields – e.g. in the design and operation processes of new technologies – demand is expected to increase. According to estimates, the pace of automatisation will be above the European average in Central Eastern Europe, and its effects on the labour market will most probably appear in the region. HCIC IEER examined the automatability of jobs in Hungary and compared them with employment figures. The early findings of that research are presented in the following summary.

According to the results of the first research papers on the topic, automatisation primarily affects routine tasks that are made up of clearly describable and easily programmable sub-tasks. With tasks that are not repetitive, and thus can only be done by humans, robots and computers can only help in auxiliary roles. Routine tasks that are mostly manual, e.g. production, assembly of parts, conveying, sorting, etc. are the most easy to substitute, followed by more cognitive tasks like measuring, data registering, customer service etc. What is more, now even some complex tasks can be automated - made possible by the development of technologies such as machine learning and 3D printing.
However, in some fields automatisation has still not been solved, there are technical obstacles described that make it virtually impossible to automatise certain tasks. Such tasks are non-repetitive and/or abstract/complex, and they generally need skills which are non-mechanisable, such as dexterity, creative intelligence and social skills.

Employment categories in the FEOR register
As part of our research we defined the level of automatability for each job appearing in the Hungarian FEOR (Standard Classification of Occupations) register. To achieve this, we categorised the tasks listed in the FEOR job descriptions as automatable (-1) and not automatable (1). As the first step of such categorisation, we tagged automatable tasks and hindering factors with key words, and ran Zurvey, a text analysing programme, on the job descriptions to find matches for our key words. If a task contained a key word suggesting that automatisation may be hindered, we categorised it as not automatable. If there was a match for a key word describing automatability, the task was categorised as automatable. For uncategorised tasks, the keyword-based analysis was amended with manual coding.

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MBET 2019 Sept

Monthly Bulletin of Economic Trends | October 2019

Late payment and circular debt in Hungarian business life

This analysis by IEER concerns the experience of Hungarian businesses with late payment and circular debt. The results are based on IEER's July 2019 Quarterly Business Climate Survey, which involved 404 domestic respondents. Based on the answers, 68,6% of businesses had at least one partner that paid late in the first half of 2019, and 34% of respondents made late payments themselves to their suppliers in the examined period. The issue of late payment most often hits large companies (with more than 250 employees) and industrywise construction and providers of other business services are the most affected. All-in-all it can be inferred that the after the favourable period last year, the trends in having more business partner who pay late is starting to creep back to its prior 2018 level. By the same token, proportion of their income arriving late has become threefold, compared to the last period measured. However, the number of companies that failed to pay in time to their suppliers at least once due to the late payment of their customers basically remained unchanged since July 2018.

In the course of IEER's July 2019 Quarterly Business Climate Survey, 404 domestic respondents were surveyed about late payment and circular debt.
68,6% of the surveyed companies had at least one business partner that paid late multiple times in the first half of 2019. As it could be observed in Figure 1, the rate of the same companies was 55% in the second half of 2018 and 63% one and the half year before, in 2018 January meaning that the amelioration of the previous period was not here to stay and the ratio is resembling more to its levels prior 2018 July. The proportion of companies with more than half of their partners paying late also increased considerably. In July 2019, 10% of companies were such, whereas the same ratio was much lower before: 2% and 3% in July 2018, and January 2018, respectively.

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MBET 2019 Oct

Monthly Bulletin of Economic Trends | November 2019

Findings of the IEER Business Climate Survey taken in October 2019: Business situation worsening, expectations more pessimistic

The latest Business Climate Survey taken by IEER is based on the answers of 2268 CEO respondents. According to the results, the Business Climate Index dropped back to 46 points in October 2019 from 58 points measured in April. This has been the lowest score since October 2015.Businesses thus seem to judge the business climate as being far less favourable than before, meaning that the improving tendency starting in October 2017 broke. The reason behind this may be that expectations concerning the future business situation, investments and orders all became more pessimistic in the previous half. It was the business situation outlook that dropped back the most significantly.

The latest Business Climate Survey taken by IEER is based on the answers of 2268 CEO respondents. According to the results, the Business Climate Index dropped back to 46 points in October 2019 from 58 points measured in April. This has been the lowest score since October 2015.
Businesses thus seem to judge the business climate as being far less favourable than before, meaning that the improving tendency starting in October 2017 broke. The reason behind this may be that expectations concerning the future business situation, investments and orders all became more pessimistic in the previous half. It was the business situation outlook that dropped back the most significantly.

The Uncertainty Index was 8 points higher than in April, this time at 44 points. This might mean that the companies' business situation assessment has become less uniform compared to the time the previous study was taken.

The IEER Business Climate Index by company features

The Business Climate Index was the highest for trading companies (+56 points), while for companies in the construction industry it was somewhat lower (49 points). Business service providers and businesses in the processing industry are at 48 and 42 points, respectively. Half-on-half results show that it was the processing industry that experienced the heftiest drop (19 points since April). Corporations in the construction industry, service providers and trading companies all scored lower – by 11 points, 7 points and 3 points, respectively – than in the previous half.

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MBET 2019 Nov

Monthly Bulletin of Economic Trends | December 2019

Findings of the IEER Business Climate Survey taken in October 2019: Business situation worsening, expectations more pessimistic

The Quarterly Business Climate Survey taken by the Institute for Economic and Enterprise Research (IEER) of the Hungarian Chamber of Industry and Commerce is based on the answers of 400 CEO respondents about their business situation and expectations. According to October 2019 results, business climate deteriorated compared to July 2019: the Quarterly Business Climate Index dropped from 33 points to 26 (see fig. 1).
By sectors, the Quarterly Business Climate Index was the highest among trade companies (+32 points). Companies offering business services (+31 points) rank as second, followed by processing companies (+24 points) and construction companies (+19 points). Quarter-on-quarter, the fall was 30 points in the construction industry, 11 points in the trading industry, 6 points in the processing industry, and 4 points with companies offering business services.
Regarding exports, the lowest (+22 points) Quarterly Business Climate Index value was reached by major exporters, whereas it was +33 points in the group of minor exporters and +27 points for non-exporters. Compared to the previous quarter, the index decreased by 12 points in the group of minor exporters, by 11 points in the group of non-exporters, and by 4 points in the group of major exporters.
The Quarterly Business Climate Index was +31 points in the group of companies with 20-49 employees; 50–99 companies scored +25 points, 100–249 companies scored +31 points, and 250+ companies scored +25 points. A downward tendency was measured all throughout: compared to July, there was a 14 point fall in the 50–99 category, a 7 point fall in the 250+ category, a 6 point fall in the 20-49 category and a 4 point fall in the 100-249 category.
The Quarterly Business Climate Index has ten components, such as:

• current/expected business situation;
• current/expected profitability;
• expected investing activity;
• current stock orders;
• production level in the previous half/expected production level;
• expected changes in employee numbers;
• expected capacity utilisation.

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MBET 2019 Dec

Monthly Bulletin of Economic Trends | January 2019

Results of the October 2018 IEER Quarterly Business Climate Survey

The Quarterly Business Climate Survey of IEER is based on the answers of 400 CEO respondents, now surveyed about their business situation and expectations. The Quarterly Business Climate Index and the Quarterly Uncertainty Index were calculated from the full sample of 300 small and medium-sized enterprises (20-249 employees) and 100 large enterprises (250+ employees). For small and medium-sized enterprises, the SME Outlook Business Climate Index and the SME Outlook Uncertainty Index were calculated.

According to October 2018 records, the level of business confidence in Hungary stayed unchanged compared to the previous quarter: the Quarterly Business Climate Index stagnates compared to the 42 points calculated in July. This score has been the highest since records of Quarterly Business Climate Index surveys began in 2010, not unlike the score measured in July (see figure 1). The Quarterly Uncertainty Index is currently at 30 points, which is 4 points up in comparison with the records taken in the previous quarter. This might mean that the perception of the business situation became less uniform among companies since July.

However, if business confidence is examined separately, the SME Outlook Business Climate Index has been climbing since the drop in July: from 34 points it is now up at 41 points. This has been the highest score in the history of our SME Outlook Business Climate Index, with records starting in 2005 (see figure 2). The SME Outlook Uncertainty Index, now at 36 points, increased by 6 points since July 2018, meaning that the opinion of small and medium-sized enterprises became less uniform...

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