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Construction output slows in May

Output of Hungaryʼs construction sector climbed 26.3% year-on-year in May, data released by the Central Statistical Office (KSH) on Tuesday show. Output volume rose in both main groups of the sector: in the construction of buildings by 27.0%, and in civil engineering works by 25.7%.

Headline year-on-year output growth slowed from 40.1% in April and 67.6% in March. Based on seasonally and working day-adjusted indices, construction output decreased by 0.6% compared to April.

Output of the buildings segment was lifted by construction of factories and warehouses, the KSH said. Civil engineering output continued to be supported by road and railway projects, it added.

Of the divisions of construction, output volume increased by 25.6% in the construction of buildings, by 23.5% in civil engineering, and by 28.7% in specialized construction activities.

The volume of new contracts decreased by 1.1%, within which the volume of new contracts concluded for the construction of buildings fell by 24.0%, while for civil engineering works the volume grew by 11.9% year-on-year. High-value contracts were signed mainly for road construction.

The month-end stock of contracts at construction enterprises decreased by 8.1% year-on-year in May. The stock of contracts increased by 38.4% for the construction of buildings, but fell by 19.1% for civil engineering works compared to the end of May 2018.

In January-May 2019, compared to the first five months of the previous year, output of the construction sector grew by 40.4%.

In absolute terms, the value of construction output stood at HUF 361.5 billion in May, and at HUF 1.446 trillion in January-May.

Takarékbank analyst Gergely Suppan told state news agency MTI that unseasonably cold, wet weather and a high base may have contributed to the slowdown in growth in May. He put full-year growth at around 30%.

Construction sector output data for June, and for the first half of 2019, will be published on August 12.