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Construction sector expands by a third in August

Construction

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Output of Hungaryʼs construction sector rose by 36.8% in August from a year earlier, according to a first release of data from the Central Statistical Office (KSH) on Tuesday. Last year the sector contracted by more than 18%.

Output increased year-on-year in both main groups of construction: by 46.8% in the construction of buildings, and by 24.1% in that of civil engineering works.

Based on seasonally and working day-adjusted indices, construction output grew by 9.8% in August compared to the previous month, after a 1.9% monthly drop in July.

The KSH said that growth in the construction of buildings was primarily the result of the construction of industrial and warehouse buildings and, to a lesser extent, sports facilities as well as educational and residential buildings in August.

In the case of civil engineering works, production grew both as a consequence of a low base, and as a result of road, railway and utility construction works.

Of the divisions of construction, output increased by 46.5% in the division of construction of buildings, by 28.2% in civil engineering works, and by 35.9% in specialized construction activities.

The volume of new contracts increased by 46.0% compared to the same period of the previous year. Within this, the volume of new contracts was up by 95.4% for the construction of buildings, and by 18.9% for civil engineering works.

New contracts were concluded mainly for the construction of industrial buildings and, to a lesser extent, housing and hotel buildings. Growth in civil engineering works was the result of contracts signed for railway development, as well as utility and road construction.

At the end of August, the month-end volume of contracts of construction enterprises was 89.7% higher than the previous yearʼs low base. The volume of contracts was 22.2% higher for the construction of buildings, and 134.6% higher for the construction of civil engineering works than a year earlier.

In January–August 2017

In January-August 2017, compared to the equivalent eight-month period of the previous year, the volume of construction output grew by 27.9%. This compares to a contraction in the sectorʼs output of 18.8% in 2016.

The rise in the building segment reflected, as before, mainly the construction of industrial buildings and storage facilities, and to a lesser extent sports facilities, educational buildings and homes, the KSH said. In the civil engineering segment, road, railway and public utilities projects were the source of the expansion.

In absolute terms, the value of construction sector output reached HUF 240 billion in August, at current prices.

Construction output figures for September 2017 will be published by the KSH on November 13.

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