BUDAPEST, Sept 23 (Reuters) - Hungarian business sentimentsank to a three-year-low in September, posting its biggestmonthly fall in more than a decade as companies in industry,trade and services turned gloomier about their prospects, asurvey showed on Monday.
Think tank GKI's business sentiment indicator plunged to 0.9points in September from 7.5 points in August, hitting itslowest since October 2016, it said.
"The European Union's economy is slowing. It continued toslow in the first half," said Gabor Karsai, one of the authorsof the survey. "It is true that we have not fully felt theeffect of the German slowdown but we are not immune to it."
He said the U.S.-China trade war also hit sentiment.
Analysts polled by Reuters last week forecast Hungary'sgrowth slowing to 3.3% next year from a 4.65% pace projected for2019 as expansion in the euro area and its powerhouse Germany,Hungary's main trading partner, decelerates.
"Business sentiment has been deteriorating practically sincethe start of the year. Except for construction, sentimentworsened across all sectors in September, especially in industryand services," the survey said.
Industry confidence was at a five-year-low as companiesprojected a weaker outlook in production, stockpiles and thestock of orders, including exports, it said. Constructionconfidence rose slightly after falling for nearly a year.
Trade confidence fell to a six-year-low as the outlook fororders darkened, the survey said. Services confidence plunged toa three-year-low as turnover prospects deterioratedsignificantly, GKI said.
Except for construction, employment plans worsened acrossall sectors, driven by services. The assessment of Hungary'seconomic prospects as a whole worsened significantly among mostcompanies in September according to the survey.
The prospect of a slowdown after years of above-averageeconomic growth triggered an open clash between Hungary's topeconomic policymakers earlier this month.
Consumer confidence continued to rise, however, scaling a17-year-high in September, bolstered by record-low unemploymentrates and strong wage rises.
"The weakening Hungarian growth picture is perfectly in syncwith that of the EU, albeit with some delay," GKI's Karsai said.
"Consumer confidence was this high in August 2002. Wages arerising, inflation is tolerable and the jobless rate is verylow," he said. "No wonder people are optimistic, but obviouslythe business confidence is bound to have an impact."(Reporting by Gergely Szakacs; Editing by Hugh Lawson)