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Slovakian executives are the most optimistic in the region

Business Sentiment Index - 4th edition


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Budapest, Hungary - 12 October 2010 - The results of the latest Business Sentiment Index from Deloitte Central Europe show that more and more executives in the Central European countries surveyed have slowly increasing positive expectations about the business prospects of their companies and economies. The survey indicates that differences among various countries in the region are growing: While the extremely positive sentiment of Polish executives reflects the number one economic performance within the region, there has been a rapid and significant improvement in terms of the business prospects of companies in Slovakia. On the contrary, the vast majority of executives in Hungary, Romania and most Southern countries within the region continue to be pessimistic about the future growth prospects of their companies.

Béla Seres, Partner-in-Charge at the Financial Advisory service line of Deloitte Central Europe, says: Since the first survey in September 2009, the overall outlook has slowly become increasingly positive. When analysing individual countries' responses, the results of this periodic survey clearly highlight the differences in the pace of recovery from the recession.

 

Slovakia is the clear 'winner' of the September 2010 survey, with 71% of executives now believing general prospects for the economy over the next six months are improving. This is a significant jump of over 24% from the results of April 2010, in which only 47% felt this to be the case. There is also optimism in Slovakia about the availability of credit with 81% of executives saying that credit required for growth is available, compared to 53% in September 2009. The steadily increasing number of positive responses reflects the improving economic situation in the country.

 

In previous surveys, Poland has consistently been the most positive of all the six countries surveyed, so it is interesting that Slovakia now reports a similar rise in outlook to its neighbour. It's not all good news, however: the results of the survey show that responses from other countries are much more muted than in Slovakia and Poland.

 

Béla Seres pointed out: According to the survey, Hungary remains fairly static in terms of the outlook for the next 12 months. There has been a slight improvement in plans and expectations concerning capital goods and employment (i.e. the main indicators) over figures recorded in April 2010 but none of the changes can be considered remarkable. However, 31% of respondents in Hungary feel that the availability of credit required for growth is low or very low; currently, Hungarian executives are the most pessimistic ones in the region in this respect.

 

Meanwhile, although Croatia and the Czech Republic see greater optimism in general economic prospects, overall they remain fairly cautious about the next six months. Romania, which now sees a good jump in terms of most indicators compared to the figures of prior surveys, records a 10% drop in positive sentiment about economic prospects (now 37%, down from 47% in April 2010). 

 

Report highlights

  • There is a greater expectation of spending on capital goods over the next 12 months. Since the first survey, twice as many executives are now optimistic about increased capital expenditure (41% of respondents, compared to 19% in September 2009).
  • Similarly, twice as many executives (25%, although this figure is still extremely low) now believe employment levels will rise over the next 12 months – compared to just 12% believing this in September 2009.
  • Executives are becoming increasingly more optimistic that credit is available, with 40% now saying it is 'easily' available. Opinion about regulatory changes to markets following the global economic crisis is, in the main, optimistic. Slovakia sees the greatest jump in positive sentiment about an improvement in the regulatory environment, with 42% now thinking it will be less restrictive, compared to no executives at all thinking this in April 2010.

 

There has been a positive shift in responses to the questions of capital expenditure, employment and credit availability – but the rate of recovery remains slow and cautious for countries in the region. Only - Slovakia and Poland - show definite signs of recovery -Béla Seres added.

 

Background to the index

The index is a research-based analysis of the opinions and predictions of executives from the largest companies in Croatia, Czech Republic, Hungary Poland, Romania and Slovakia.

Deloitte published the findings of the first Business Sentiment Index in September 2009.

The sample size encompassed almost 200 executives from the largest companies in the region.

For more details please visit: www.deloitte.com/bsi

 

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Deloitte Co. Ltd.
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