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Investment Volume Down 12.1% y.o.y. in Q3

Figures

In the third quarter of 2023, the volume of investments decreased by 12.1% compared to the same period of the previous year and lessened by 2.2% compared to the previous quarter, according to data published by the Central Statistical Office (KSH).

Most sections of the national economy contributed to the general investment decrease. Investment performance increased only in manufacturing, in the public administration section, as well as in a few, overall relatively small weight representing fields.

Compared to Q3 2022, construction investments, representing about 60% of the total volume of investments decreased by 22%, at the same time investments in machinery and equipment, representing 40% of the total value of investments grew by 6.8%. The latter is primarily due to the 7.8% volume increase in imported machinery and vehicles.

The volume of investment in the case of enterprises employing at least 50 people, realizing 55% of the investment performance decreased by 9.1%, in the case of budgetary units, realising 15% of investments, developments grew by 10% compared to the level of the previous year, owing primarily to technical reasons. The volume of other investments (enterprises with fewer than 50 employees, individual enterprises, non-profit ones as well as households) was below the one-year-earlier level by 24%.

The performance value of investments fell in 13 out of 19 sectors of the national economy. Growth dynamics of manufacturing, representing the largest weight, accounting for almost one-third of investments in the national economy, slowed in the past quarters; developments increased by 6.3% during the current quarter. This is mainly explained by the single-digit growth of the investment volume in the manufacture of electrical equipment, having the largest share, which grew at a more subdued pace than in the previous periods, mainly due to the gradual winding down of large-scale projects going on for a longer time, according to KSH.

At the same time, the volume of investments in transport equipment production, representing the second largest weight, grew very dynamically, developments in several domestic transport equipment manufacturing and supply factories, some of these being capacity-expanding projects, contributed to this trend. Growth was also recorded in investment within the subsections of rubber, plastics, and building materials industries, electronics industry, and machinery and equipment manufacturing, while several other subsections decreased in varying degrees.

The investment performance of real estate activities, the second largest investor, accounting for 18% of developments in the national economy fell significantly, by 29% compared to the same period of the previous year. The volume change was determined mainly by the decrease in the house building construction and real estate renovations in the current period.

The investment volumes in transportation and storage fell by 27%, a somewhat more subdued pace than in the previous quarter, this unfavorable performance is still mainly due to the lessening in state infrastructural developments.

The reason for the 11% volume decrease in wholesale and retail trade was – among others – the decrease in the investment activity of the enterprises active in retail trade in the current period, as these stimulated the growth in the same period of the previous year.

Investment performance in agriculture fell by 21%, as farmers cut back on development spending in both construction and, to a lesser extent, in imported machinery.

The section of public administration increased the volume of investments by 9.3% due to the expanding developments in central public administrations.

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