In Hungary, domestic SMEs expect record-high sales growth in the next year. According to the highest financial expectation in the 17-year history of K&H Confidence Index research, entrepreneurs plan to have an average of 11% more sales revenue and 6% more profit for the year ahead.
The expectations of domestic SMEs have risen to unprecedented heights in terms of one-year sales. According to the latest results of the K&H SME Confidence Index survey, which indicates the prospects of micro, small and medium-sized enterprises, entrepreneurs expect an 11% increase in sales revenue. This is the highest value in the index’s 17-year history.
The biggest jump can be seen among the micro-enterprises with annual sales of between HUF 20-100 million (approx. 57 055- 285 279 EUR), which are currently expecting 13.5% more revenue after 8.6% in the first quarter. In the case of small enterprises with a turnover of between HUF 100 and 300 million (approx. 285 279 – 855 839 EUR) and medium-sized enterprises over HUF 300 million, the company managers are also planning a high financial growth of 8.4% and 7.5%, respectively. In the entire SME sector, only 7%of businesses fear that their sales will decline in the coming months.
Based on the results of the second quarter, the record-high sales revenue expectation is currently associated with average profit growth of 6%. Here, too, micro-enterprises are the most optimistic, expecting an 8.3% increase in profits. In contrast, forecasts for small and medium-sized businesses show 3.9 and 3.8 % higher profits, respectively, over the next year.
Optimistic financial expectations may also boost the use of favorable financing opportunities. While most indicated self-sufficiency (54%) and the use of tender funds (33%) as conceivable sources, the number of entrepreneurs thinking about domestic borrowing also jumped dramatically. Nearly a third of businesses (32%) count this as a future financing option, compared to 24% in the previous quarter.
K&H SME CONFIDENCE INDEX
K&H was the first in Hungary to start examining the expectations of Hungarian micro, small and medium-sized enterprises for the next year. The research examines the 10 economic factors that most influence the economic situation of enterprises and their expected changes: customer relations, supplier relations, labor, corporate finance, banks, economic policy, public burdens, EU, competitive situation, corporate loan interest rates. The K&H SME Confidence Index is a weighted average of the 10 sub-indices, according to how important each factor is perceived by enterprises. The last measurement was made by Impetus Research in 2021.
Source: Bank’s press release from August 18, 2021