Weak demand limits production in CEE

In numerous CEE countries, increasing number of firms see demand as a factor limiting production. Although private consumption recovered to a great extent, it seems that demand is not as strong as could have been expected given the wage increases. The situation is more worrying on production side as percent of companies in CEE that see demand as limiting factor is the highest since the pandemic. Namely, in Czechia, in Poland and in Slovakia the percent is the highest since mid-2020. Further, in Hungary, the percent seeing the demand as limiting factor (53.8) was not that high even during the pandemic. Such development comes in contrast with shortage of material and equipment that was a major issue during pandemic. Further, such development goes hand in hand with declining level of capacity utilization that (apart from pandemic year 2020) is the lowest in last decade. It has been gradually declining since the beginning of 2022.