Pre-fab home building market faces labor shortage

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A reduction in the home construction VAT rate has boosted orders for pre-fabricated homes, but a shortage of Hungarians with the skills to erect those homes could weigh on business, said József Kárpáti, who heads the pre-fab chapter of construction association EVOSZ, according to a MTI report today.

Many of the Hungarians qualified to erect pre-fab homes have gone abroad to work since the economic crisis, Kárpáti explained. In 2009, 31 companies received orders to build 950 pre-fab homes; last year, orders fell to 100 and the number of companies in the business was down to seven, he added.

Since the home building VAT rate was reduced to 5% from 27% at the start of the year, pre-fab home companies have received at least a hundred orders. They are trying to entice Hungarians working abroad in the field to return home in exchange for higher wages, and these payroll costs could bite into savings resulting from the VAT cut, Kárpáti said.

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