The confidence index, measured on a scale between 100 and -100, was -5.6 in April, an unprecedented low in the survey's history. Negative results can be ascribed to the pessimistic mood of the retail sector, where the index fell to a record -21.5 points, as well as to the tax burden and fierce competition.
The fact that firms viewed the EU-related cost burden less negatively as before was not able to counterbalance the discouraging results. The majority of small and mid-enterprises expected the economy's course to take an unfavorable turn in the following year, K&H said.
According to the nationwide survey, SMEs' expectations depended in large part on company size. Firms with an annual revenue above HUF 300 million (USD 1.5 million) expected their situation to improve in the coming months, while enterprises where revenues were below HUF 100 million were generally pessimistic.
Of all SMEs, 80% were planning to carry out investments in the next 12 months, down from 88% in the September 2004 survey. The most intense equipment procurement spree can be seen in agriculture, where 76% of enterprises are considering such plans.
