The Hungarian construction industry is showing signs of recovery

FM newsroom – construction industry. Based on raw data, construction output volume was over the previous year’s level by 15.6% in April 2024. Out of the main construction groups, the construction of buildings increased by 10.8%, and civil engineering grew by 22.6% – according to data published by the Hungarian Central Statistical Office (KSH).

Numbers contradict predictions

The industry has general agreement that the sector’s economic conditions are very bad due to high interest rates, the loss of EU funds, tight domestic demand, and the restraint of public spending. Based on this, experts predict a particularly weak year for the sector, which shrank by 5% last year—Property Forum writes.

The 11% month-on-month jump reported by KSH means that construction production was 15.6% higher than a year earlier. Compared to the same month of 2023, the output of both main groups of construction grew: the construction of buildings rose by 10.8%, and that of civil engineering grew by 22.6%. Among the construction divisions, production volume increased by 26.7% in the construction of buildings and by 4.7% in civil engineering. Production in specialized construction activities has the most significant weight, expanding by 14.3% – Budapest Business Journal reports referencing the KSH data.

However, this does little to help us see a clearer picture as the sector’s output fluctuates from month to month.

Based on the partial data provided by the Central Statistical Office (KSH), both buildings and civil engineering expanded in April, and the specialized construction subsector also performed well. This suggests that the increase was not necessarily due to the activation of a single high-value investment.

Demand shown in order figures

The volume of new contracts increased by 23.0%. Within this, the volume of contracts for building construction increased by 16.5% and for civil engineering by 30.9% compared to the same period of the previous year.

Stronger order intake in recent months has also increased the overall order stock. At the end of April, the contract stock of construction companies decreased by 0.5% compared to the same period of the previous year, within which the volume of contracts for the construction of buildings increased by 1.1% and decreased by 2.0%.

The industry is better than expected

These data also do not indicate that the construction industry is headed for further decline. So far, the construction industry is performing much better than expected in the first third of the year. However, the reasons for this and the prospects are very unclear, so we have nothing to do but wait for the data of the coming months, which can help us get a clearer picture of the state of the sector – Property Forum concludes.


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