After a general feeling of catastrophe in April, consumer pessimism eased in May

GKI’s consumer confidence index grew again in May and eliminated almost a third of its April fall. The 38-point drop in April was followed by an improvement of more than 11 points in May. The index rose, presumably as a result of the lockdown easing measures announced by the government, to an otherwise extremely pessimistic -38.5 point after its -50 points in April.

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The virus did not spare the housing market – turnover and prices may also fall – GKI residential market survey results for April 2020

The expectations of housing companies clearly deteriorated in April 2020 compared to a quarter earlier – according to the survey of GKI and Masterplast. The epidemic caused by the corona virus has crashed the already slowing housing market, so the outlooks have become much more modest. The value of Budapest and Hungarian housing market index of GKI fell sharply on a quarterly and annual basis. According to the respondents, an average price drop of around 9-10% is expected in Budapest and 7-13% in the countryside for the next 12 months.

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GKI’s economic sentiment index plummeted by an unprecedented extent in April

The GKI economic sentiment index fell by an unprecedented extent of almost 30 points, apparently due to the economic effects of the COVID-19 epidemic. The business confidence index declined by about 25 points and the consumer one by nearly 40 points. Although during the global economic crisis, in the first half of 2009, expectations were already much more pessimistic, the GKI economic sentiment index has never fallen by more than 10 points in a single month. (See the interactive Vizzu graph below showing the course of previous crises as well.)

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You can reach the archive of survey summaries here.

Home renovation and modernization can be the first to wake from the nightmare caused by the coronavirus

The coronavirus epidemic is destroying the operating environment of the construction industry. According to a joint survey by GKI and Masterplast, after the crisis is over, the prospects for home renovation and modernization will clearly be more favourable than home construction. Due to expected residential caution, the need for smaller renovations may increase rather than buying a new home that is a much larger investment.

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Forecast for 2020: 3 or 7 percent decline

In the current situation, GKI considers it difficult to make any detailed forecasts. Therefore, it only undertakes to present the possible main trends based on two scenarios. The COVID-19 is already a worldwide pandemic; however, its depth and duration are completely uncertain. While the Chinese economy is starting to show signs of recovery, COVID-19 is now spreading in Europe, and strict measures are being introduced to restrict the movements of people. The general downturn in the world’s stock exchanges, with occasional positive corrections, illustrate a climate of general fear and uncertainty.

You can download the forecast from here.

The archive of earlier forecasts is available here.