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Monthly Bulletin of Economic Trends I March 2020

Hungarian businesses' perceptions concerning the economic effects of the coronavirus pandemic

The Hungarian Chamber of Commerce and Industry (HCCI) surveyed Hungarian companies about the economic effects of the global pandemic. In the first wave, there were 16340 respondents answering by 23rd March, 2020. Incoming answers were analysed by HCCI's Institute for Economic and Enterprise Research. In the survey the overwhelming majority of businesses (83%) reported an unfavourable business situation. This is particularly true for companies specialising in accommodation/catering services, trade and delivery/logistics – these branches being the most vulnerable to the pandemic. Furthermore, business have become much more pessimistic since mid-March. Since then, the number of companies deeming their situation as most unfavourable increased by almost twofold (from 37 to 67 per cent). Almost a half (41 per cent) of the surveyed companies experienced serious hindering issues that were linked to the spread of the virus.

This analysis features three main aspects: companies' expectations about the business situation in the future, their perception of the current situation, and crisis management options. The vast majority of respondents (83 per cent) expects a deterioration in their business outlook although the adverse effects are currently experienced by somewhat less than a half of them. Yet the overwhelming majority of respondents (about 83%) have no emergency scenario to manage the crisis. Among those who do have crisis management strategies the most popular solution is working from home (i. e. home office): almost a third of such companies would switch to home office when needed.

The impact of the pandemic on companies' business situations

The majority (83%) of respondents thinks that their company will have to grapple with an unfavourable business situation in the upcoming six months, while 50% expects a particularly gloomy business situation in the next half. 13 per cent believes that their situation will not change, and only 5 per cent expects a boost.
As for company size, SMEs employing 10-49 people see their futures the darkest. The rate of SMEs that expect unfavourable or very poor future business situations is quite high (86%) compared to others. Looking at industries we find that these expectations are the most common among companies specialising in accommodation and catering services (93 percent), trade (86 per cent), delivery and logistics (86 per cent) and miscellaneous services (86 per cent), as shown in Figure 1.

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Territorial Innovation Platform established at Szent István University

The Territorial Innovation Platforms (TIP) initiative was launched in October last year by the National Research, Development and Innovation (NRDI) Office, with the policy support of the Ministry for Innovation and Technology. So far, the charter document has been signed by 11 universities in Budapest and six more in rural Hungary, and today Szent István University also established its TIP.

The initiative aims to facilitate territorial partnerships across the country based on university knowledge bases with an aim to ensure direct access to information about innovation policy directions, enable and strengthen cooperation between local innovators, and create new professional foundations.

The future performance and competitiveness of the new Hungarian innovation ecosystem largely depend on increased local cooperation between stakeholders, such as policy-makers, higher education and research institutions, businesses and professional organisations; which can boost the innovation potential of each region in line with the priorities of the Smart Specialisation Strategy. To this end, building on the existing university centres and focusing on the real strengths of key regional innovators, the NRDI Office intends to create new hubs which adopt a new approach to facilitate information flow, knowledge transfer, collaboration and networking.

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Source: https://nkfih.gov.hu

2020 Business Year Launch- HCCI Conference

Companies must leave their comfort zone if they want to avoid their business collapse, Prime Minister Viktor Orbán said at a conference organised by the Hungarian Chamber of Commerce and Industry today to launch the 2020 business year. Focussing on short and long term affects of the Coronavirus epidemic, he said the government and the Central Bank will help those in trouble.
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Hungarian Startup University Programme to kick off in September

This is the first practice-oriented, quality-assured programme on startups, market environment and the operation of innovative businesses that provides the same high level of training in every part of the country.

In 2019, the Expert Panel on Startups of the National Research, Development and Innovation (NRDI) Office published a package of proposals for the startup ecosystem, including a proposal on the Hungarian Startup University Programme. The first e-learning course is going to be available in many universities across the country in September 2020, with the policy support of the Ministry for Innovation and Technology (ITM).

There is a significant untapped potential in the heads of university students, and the market is always open to good ideas. However, there seems to be a long way to go before knowledge on innovation becomes widely available and before a good idea can reach the prototype and startup stage. The Hungarian Startup University Programme aims to speed up this process by introducing young people to the world of innovation and providing them a practical guide to starting a business.

Startup skills are in demand nearly everywhere

Students will develop an entrepreneurial mindset and solution-oriented thinking in the programme. The aim is not to produce thousands of startups but to spark interest in this world. However, if they feel like starting a business later on, we will give all the support they need – said Krisztián Kölkedi, senior adviser on youth strategy and startups of the NRDI Office.

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Source: https://nkfih.gov.hu

Hungary’s Economy Engine Automotive Industry to Pull the Brakes?

In recent years, Hungary has achieved strong economic growth. However, according to the latest statistics, there is a significant downturn in the production of several sectors, most prominently including the automotive industry. Given the huge weight of this area in Hungary’s economy, how the negative global trends affect the country’s performance is an important question.

Hungary is one of the most exposed economies to the automotive industry. The sector has become a critical engine of industrial production in Hungary since 2011, and in the last nearly two decades, companies in the industry have managed to increase their output significantly almost every year, mainly due to lasting export demand. If the export market were to fall behind, it would hugely impact the economy and drastically degrade its performance.

In their 2018 industry report, the Central Statistical Office (KSH) revealed that the automotive industry’s share of the manufacturing output was over 28% in 2018, although their output increased only slightly, by 1.5% in 2017 and then practically stagnated in 2018.

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Source: https://hungarytoday.hu/