The dynamic expansion characterizing the whole of the previous year continued in Q2, with the volume of investments 19% higher than that of the same period in 2018, says a new report from the Central Statistical Office (KSH).
KSH explains that the role of developments financed from EU sources, realized mostly by government institutions, further diminished. At the same time investments, primarily those in manufacturing, dynamically expanded.
The seasonally adjusted volume of investments exceeded the previous quarter’s by 4.1%, and the average of the quarters in 2015 by 53%.
Construction investments, representing nearly six-tenths of the total volume of investments, rose by 22% over 2018, while investments in machinery and equipment, representing around four-tenths of the total, increased at a slower pace, by 15%. In this sector, acquisitions of domestically produced assets contributed significantly, the agency says.
Investment performance in the case of enterprises employing at least 50 people and realizing approximately six-tenth of investments increased at an accelerating rate of 31%. Budgetary units, performing about 15% of investments, grew somewhat slower than the average pace of the previous periods, by 21% compared to the previous year.
Investment activity increased in almost every sector of the economy. Developments in manufacturing, representing more than a quarter of the total investments, grew by 30%, with growth registered in the majority of its subsections.
Growth was recorded primarily in the field of electrical equipment manufacturing, thanks to the suppliers to the automotive industry. Growth was also seen in chemicals and chemical equipment manufacturing.
In the increase of developments, both green- and brownfield investments played a role. The investment activity of enterprises with foreign capital was significant as well.
The dynamic growth of investments in transportation and storage, considered the second largest investor, continued to grow at a rate similar to the previous periods, as the volume increased by 20%, mainly as a result of public road reconstructions and ongoing road and rail construction. Enterprises operating in urban and long-distance transport conducted considerable investment activities too.
The investment performance of the real estate sector, considered the third largest investor, representing 16% of total investments, also grew significantly (15%), with a strong increase in investments in business facilities for rent outweighing the decrease in dwelling constructions.
In the section of wholesale and retail trade, and repair of motor vehicles and motorcycles, considered the fifth largest investor, the increase of investment performance grew by a relatively modest 6%.
State-financed investments continued to play a major role in the expansion across the entire economy. Public administration, defense and the compulsory social security sector are now considered the fourth biggest investor, with growth of 13% year-on-year. Construction of flood control infrastructure was a contributory factor here.
There was also growth among some of the sections representing a relatively small weight. In accommodation and food service activities, where growth of 82% was registered, hotel construction and renovation contributed most to the positive result.
In water supply and waste management, investments grew by 64% due to water quality improvements, sewage water treatment and waste management projects, financed partially from EU funds.
Construction business units increased their tangible-asset developments by 28% as a result of favourable economic trends.
There were four sections where the volume of investments did not match that of Q2 2018: the energy industry (-12%); professional, scientific and technical activities (-4.5%); administrative and support service activities (-3.7%); and education investments (-3%).