Civil engineering drives November construction growth
The volume of construction output in Hungary was 30.7% higher in November 2017 than the low base a year earlier. Output increased in both main groups of construction: by 29.1% in the construction of buildings, and by 33.9% in civil engineering works, according to a first release of monthly data by the Central Statistical Office (KSH).
Based on seasonally and working day-adjusted indices, construction output fell by 1.4% in November compared to the previous month.
In November 2017, compared to the same month of the previous year, growth in the construction of buildings was the result not only of the construction of industrial buildings, but of residential and educational facilities, while in the case of civil engineering works, output grew - against a low base - as a result of the construction of expressways and railway renovation works.
Of the divisions of construction, output increased by 34.7% in the construction of buildings, by 40.2% in civil engineering, and by 23.8% in specialized construction activities, the KSH data show.
The volume of new contracts increased by 11.7% compared to the same period of the previous year, within which the volume of new contracts decreased by 8.2% in the construction of buildings, while growing by 43.4% in civil engineering works. New contracts were concluded mainly for road construction and railway development.
At the end of November, the month-end stock of contracts of construction enterprises was 110.3% higher than the previous yearʼs low base. The stock of contracts was 30.2% higher for the construction of buildings, and 161.6% higher for civil engineering works than a year earlier.
In January–November 2017, compared to the corresponding eleven-month period of the previous year, the volume of construction output grew by 28.7%.
Speaking to state news agency MTI, analyst Dávid Németh of K&H Bank noted several impediments that could slow down further growth in the sector, such as labor shortages and uncertainties related to the preferential VAT rate on home construction.
András Horváth of TakarékBank projected construction sector output growth of around 28% in the full year 2017.
László Koji, head of construction industry association ÉVOSZ, said the latest order stock data suggest that the sector could still have two-digit output growth in 2018, with output likely to continue to grow in 2019.
Construction sector data for the full year January–December 2017 will be published by the KSH on February 12.
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