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October sees 38.1% rise in construction output

Construction

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The volume of construction output was 38.1% higher in October 2017 than the low base a year earlier. Output increased in both main groups of construction: by 27.3% in the construction of buildings, and by 51.7% in civil engineering works, according to monthly figures released by the Central Statistical Office (KSH) on Friday.

Based on seasonally and working day-adjusted indices, construction output grew 6.0% in October compared to the previous month.

In October, growth in the construction of buildings was the result not only of the construction of industrial buildings, but of residential, office and educational facilities, while in the case of civil engineering works,  output - along with the low base factor - grew as a result of the construction of highways and railway refurbishment works, noted the KSH.

Of the divisions of construction, output increased by 27.1% in the division of the construction of buildings, by 54.8% in civil engineering, and by 35.0% in specialized construction activities.

The volume of new contracts increased by 15.7% compared to the same month of the previous year, within which the volume of new contracts grew by 42.2% for the construction of buildings and by 2.5% for civil engineering works. New contracts were concluded mainly for the construction of residential buildings and, to a lesser extent, industrial, educational and hotel buildings.

At the end of October, the month-end volume of the stock of contracts of construction enterprises was 113.3% higher than the previous yearʼs low base. The volume of the stock of contracts was 39.3% higher for the construction of buildings, and 156.7% higher for civil engineering works than a year earlier.

In January–October 2017, compared to the same ten-month period of the previous year, the volume of construction output grew by 28.4% compared to a year earlier.

Commenting on the construction output figures to state news wire MTI, analyst Dávid Németh of K&H Bank said he expects construction output growth to continue next year, based on the substantial increase in the stock of orders. He said it is positive that the gap between the building construction and civil engineering segments is narrowing.

András Horváth of TakarékBank warned that the sector could lose momentum with the expiry of the preferential VAT rate on home construction at the end of 2019, and that labor shortages could also cause problems in the industry. TakarékBank projects full-year output growth of around 28% in the sector in 2017, he added.

Construction output figures for November 2017 will be published by the KSH on January 15, 2018.

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