The index, which moves on a scale of 0 to 100 points, is based on responses from over 400 businesses.

Among the sub-indices of the VOSZ Barometer, the measure of business sentiment fell to 59 points from 62 and the gauge of propensity to make investments fell to 41 points from 49.

The sub-index based on businesses’ assessment of their financial situation dropped to 70 points from 74.

Businesses said declining purchasing power, higher prices, unpaid invoices and a fall in orders were among their biggest challenges.

One in six businesses said they could cut headcount.

Industrial Output Down 6.9% in May

Output of Hungary’s industrial sector fell by an annual 6.9% in May, 4.6% when adjusted for the number of workdays, the Central Statistical Office (KSH) said.

Month on month, output rose by a seasonally and workday-adjusted 1.6%. The detailed data show output declined year on year in the majority of manufacturing branches but increased in vehicle manufacturing and the electrical equipment segment.

Output of vehicle manufacturing, Hungary’s biggest manufacturing sector, rose by an annual 10.5% in May. The segment accounted for 26% of manufacturing output during the month.

The electrical equipment segment, which made up 12% of manufacturing output, grew by 13.4% year on year.

Output of the computer, electronics and optical equipment segment, accounting for 9% of manufacturing, fell by 6.9%, albeit at a slower pace than in April.

Output of the food, drinks and tobacco segment, which made up 12% of manufacturing output, declined by 16.7%.

Export sales edged up 0.3%. In the January-May period, output fell by 4.8% year on year.