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Pandemic plays minor role in construction sector contraction

Dwindling European Union funding at the end of the blocʼs seven-year budget period has impacted Hungaryʼs construction sector more than the pandemic, the chairman of the National Construction Companies Association (ÉVOSZ) said on public television on Wednesday, according to a report by state news wire MTI.

László Koji told news channel M1 that EU funding from the 2014-2020 budget has been used up and industry insiders are waiting for the start of the 2021-2027 funding period.

He said the pandemic has caused construction orders to fall 3-4%, a relatively small share of the total 16pc drop in order stock.

Koji said municipal council orders have been halved and attributed the decline to last yearʼs local government elections as well as to the pandemic.

Industry players are pinning their hopes on government stimulus and expect tenders to be called in September or October, he added.

Construction sector output fell 5.6% year-on-year in January-May, the latest data from the Central Statistical Office (KSH) show. In May alone, output plunged 20.1% year-on-year.