IEER quarterly business climate survey results, July 2018

The Quarterly Business Climate Index survey of IEER reveals the opinion of 400 managers on the situation and the outlook of their businesses. The basis used for calculating the Quarterly Business Climate Index and the Quarterly Uncertainty Index is a sample of 300 small and medium-sized enterprises (20-249 employees) and 100 large enterprises (employing 250 persons or more). Surveyed small and medium-sized enterprises were evaluated by using our SME Outlook Business Climate Index and SME Outlook Uncertainty Index.

According to our survey conducted in July 2018, the level of business confidence in Hungary was slightly higher quarter on quarter. The Quarterly Business Climate Index was up from 39 points in April to 42 points. The index has never been this high since our business climate records began in 2010 (see figure 1). The Quarterly Uncertainty Index was at 26 points, 2 points lower than the level of the previous quarter. Uncertainty Index values suggest that the business situation has been given a more consistent evaluation by domestic companies compared to the previous quarter.

If business confidence levels are examined in the small and medium-sized sector only, we can see that the upward trend since July 2017 is interrupted: the SME Outlook Business Climate Index has dropped from 38 points in April to 34 points (see figure 2). The SME Outlook Uncertainty Index is at 30 points, having decreased by four point since April 2018 - this value indicates that the opinion of small and medium-sized enterprises is more unified than in the previous quarter...

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MBET August 2018

Corporate reactions to the raise of the minimum wage/guaranteed minimum salary of qualified staff

The analysis is based on the April 2018 wave of IEER Business Climate Survey. The IEER Business Climate Survey is the most extensive of its kind in Hungary, the one that involves the most companies. This year, our results were based on the answers of 3274 CEOs. The results offer an insight into companies' business situations and short-term expectations. Respondents were also asked about the impacts of a raised minimum wage and guaranteed minimum salary. The sample size of respondents can be considered representative with regard to company size and economic sector.

Our brief analysis examines eight potential measures that can be reactions to the January 20181 raise of the minimum wage/guaranteed minimum salary for qualified staff. CEOs were asked to fill in the form below.
The raise of the minimum wage to HUF 138,000 and the guaranteed minimum salary of qualified staff to HUF 180,500 have resulted/will result in the following measures at your company in 2018:

• wages of those earning above the minimum wage are also increased to avoid wage tension
• planned staff recruitment is cancelled
• redundancies are made
• projected investments are postponed
• employees entitled for a raise are given new duties
• employees entitled for a raise are re-hired as part-time employees
• other benefits (e.g. perks) of employees involved are cut
• variable pay (e.g. bonus) is decreased

Of the above measures, CEOs tended to prefer the first one: 32% of them have given - or are planning to give - a raise this year to employees earning above the standard minimum wage to avoid a wage tension. Also 32% reported the cancellation of staff recruitment. Almost a quarter (24%) of the surveyed companies are planning to postpone projected investments. 13% of companies chose to decrease variable pay (e.g. bonuses). About one in ten businesses will modify the duties of employees getting a raise, cut employee's benefits, or redirect employees to part-time employment. Job cut was the least common reaction, performed by a meagre 3% of surveyed companies...

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MBET July 2018

IEER quarterly business climate survey results, April 2018

For concluding its Quarterly Business Climate Index survey, IEER asked 400 CEOs about the situation and the outlook of their businesses. The basis used for calculating the Quarterly Business Climate Index and the Quarterly Uncertainty Index was a sample of 300 small and medium-sized enterprises (20-249 employees) and 100 large enterprises (employing 250 people or more). Surveyed small and medium-sized enterprises were evaluated by using our SME Outlook Business Climate Index and SME Outlook Uncertainty Index.

According to our survey conducted in April 2018, the level of business confidence in Hungary was slightly higher quarter on quarter. The Quarterly Business Climate Index was up from 37 points in January to 39. The index has never been this high since business climate records began in 2010 (see figure 1). The Quarterly Uncertainty Index was at 28 points, 4 points lower than the level of the previous quarter. Uncertainty Index values suggest that the business situation has been given a more consistent evaluation by domestic companies compared to the previous quarter.

If business confidence levels are examined in the small and medium-sized sector only, we can see an other improving tendency: Since January, the SME Outlook Business Climate Index has increased by three points to a record-breaking 38 (see figure 2). The SME Outlook Uncertainty Index is at 34 points, having decreased by one point since January 2018 - this value indicates that small and medium-sized enterprises have been of a slightly more uniform opinion...

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MBET June 2018

Favourable business situation, improving outlook - results of the April 2018 IEER Business Climate Survey

The latest wave of the IEER Business Climate Survey is based on the responses of 3,274
enterprises. According to the findings, the Business Climate Index was at 53 points as of April
2018. This score has been the highest since 1998, the year when surveying began.

Companies still see business climate as favourable. The improving tendency of the previous year
seems to be continuing. For most part this can be put down to the fact that expectations for
unfilled orders have become much higher. Business climate outlook has also improved slightly.

Uncertainty index dropped 3 points below the October value to 39. This might mean that the
optimism of Hungarian businesses has become more uniform compared to previous year’s data...

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MBET May 2018