Hungary’s German business community is growing increasingly pessimistic, with corporate investment sentiment sinking to its weakest level since the aftermath of the 2008 financial crisis, according to the spring economic survey published by the German-Hungarian Chamber of Industry and Commerce (DUIHK).

"There’s no drama, but the trend is unmistakably deteriorating," said DUIHK head Andras Savos, adding that sentiment among DUIHK member companies, mostly German-owned, was higher during the pandemic years.  He warned of stagnation, weak demand and fading investor confidence, and said that firms are bracing for prolonged uncertainty.

Longer-term, inflation, monetary policy conditions and global trade friction were flagged as the biggest strategic challenges. He warned that unresolved international trade conflicts could hit Germany hard, and by extension, Hungary due to its deep integration into German-led manufacturing supply chains and export dependency.

The 31st survey by DUIHK showed that just 16% of the 236 German- and Hungarian-owned companies surveyed said they plan to increase investments in Hungary, while 30% intend to scale back. The -14pp net balance marks the most negative outlook since 2010, Savos added. 

Despite this gloom, 78% of respondents said they would still choose Hungary as an investment location, a slight dip from 80% last year and down from 88% four years ago.

The annual survey was conducted after in March after the German elections, but data does not reflect the impact of US tariff plans.

Around 52% of respondents gave poor marks to the state of the national economy, while 44% said it was satisfactory. Looking ahead, 44% augured a deterioration and 42% said the situation would remain stable. Just 14% augured an improvement. Assessments of Hungary's economic policy have worsened since 2022, with respect to predictability, legal certainty and corruption,

Asked about their own businesses, 28% of respondents delivered positive assessments, 49% neutral assessments and 23% poor ones. Gauging outlooks, the survey showed 26% expected improvement and 25% saw business getting worse, while 46% expected no change.

A staggering 72% of respondents cited weak demand as the main risk to their business outlook, unchanged from autumn but sharply up from last spring. Labour costs and economic policy uncertainty followed as major concerns.

Labour market expectations have also cooled as the number of companies planning to hire is roughly equal to those expecting to reduce headcount, suggesting employment levels will remain broadly flat this year. Although labour shortages have eased, wage pressures persist, with two-thirds of businesses citing continued upward pressure on pay.

The expected wage increase of 6.8% for 2025 would mark the slowest pace in four years, down from last year’s projected 11%, amid falling inflation and a cooling labour market. The survey shows that hourly wages in Hungary were among the lowest in the EU.

Communication head of DUIHK, Dirk Wolfer said German companies, employing over 220,000 people, had ploughed an annual €2-3bn annually into upgrades or capacity expansions over the last ten years. Support for euro adoption remains solid: 69% of company leaders said they would welcome the common currency, the second-highest level since 2011. Only 15% oppose joining the eurozone, the lowest figure in the survey’s history.

The DUIHK’s Investor Sentiment Index (BHI), which historically mirrors Hungary’s GDP trends, fell into negative territory this year, dropping from +3 to -4. If past correlations hold, this signals near-zero economic growth for Hungary in 2025, Wolfer added.