Hungarian construction output growth continues in April

Construction

The volume of construction output was 14.2% higher in April year on year, based on raw data released by the Central Statistical Office (KSH). The figure is impressive, but there is still room for improvement in new home construction, one analyst has said.

In April 2018 y.o.y., the volume of output increased in both main groups of construction: in the construction of buildings by 7% and in civil engineering works by 24.9%. In the buildings group, the increase was due to industrial construction; in civil engineering it was due to road, - railway- and utility project construction.

Based on seasonally and working day adjusted indices, construction output increased by 6.5% in April compared to the previous month. Output increased by 22.8% in the construction of buildings, by 23.7% in civil engineering, and specialized construction activities grew by 2.7%.

The volume of new contracts rose by 47%, within which the volume of new contracts concluded in the construction of buildings increased by 35.4% and in the construction of civil engineering works by 54.5%. In April, high value contracts were concluded for industrial and educational buildings construction, beside office buidings. Within civil engineering works, new contracts for utility and sewage plant constructions were significant.

At the end of April the volume of month-end stock of contracts at construction enterprises was 79.3% higher y.o.y. The volume of the stock of contracts was 3.8% higher for buildings and 115.6% higher for  civil engineering works.

In January-April 2018, compared to the same period of the previous year, construction production rose by 17.5%.

Analyst András Horváth of Takarékbank told national news agency MTI that there are now more than 1.5 million sqms worth of properties in the construction phase, with the value of investments exceeding HUF 680 billion, according to the latest figures from the Real Estate Roundtable, which covers a significant part of construction sector participants. This is an absolute record, which could make Hungary the regionʼs largest real estate development market, he added.

Horváth said the shortage of qualified workforce remains a major problem, even though the number of people employed in the sector stands at an all-time high, but a big part of this increase is made up of unskilled workers.

About 25,000 new homes are expected to be completed in Hungary this year, far less than the 40,000 a year considered as ideal compared to the number of homes in the country, so there is still plenty of room for expansion, he added.

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