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Investment volume down 12% y.o.y in Q3 2020

Figures

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In Q3 2020, the investment volume in Hungary decreased by 12 % compared to the same period of the previous year and by 2.1% in comparison with the previous quarter, according to data by the Central Statistical Office (KSH).

In Q3 2020, the seasonally adjusted volume of national economy investments decreased by 2.1% compared to the previous quarter. Within it, the seasonally adjusted volume of construction investments decreased by 4.4%, while investments in machinery and equipment grew by 2.2%.

Investments down in most sectors compared to Q3 2019

In the third quarter of 2020, the volume of investment activity decreased by 12% compared to Q3 2019. Construction investments representing close to six-tenth of the total volume of investments decreased by 16%, investments in machinery and equipment representing more than four-tenth of the total value of investments fell, by 6.2%. 

The volume of investments in the case of businesses employing at least 50 people and realizing 55% of investment performance decreased by 18%, where the insufficient market demand generated by the coronavirus (COVID-19) epidemic and the unnecessary free capacities created in the previous periods played a prominent role.

At the same time in the case of budgetary units, realizing 16% of investments, developments were down in a small proportion, by 7.2% compared to the base period, partially as a result of the smaller volume decrease of implemented EU-financed projects, KSH notes

Investment performance declined in more than half of the sections of the national economy. Developments in the largest weight representing manufacturing – being responsible for almost one quarter of investments – significantly fell (by 18%) in Q3. Within it, developments decreased widely in the vast majority of the subsections, in an outstanding degree in the great weight representing manufacture of transport equipment, in the manufacture of machinery and equipment n.e.c. as well as in the manufacture of chemicals and chemical products.

At the same time, in some subsections the volume of the current period increased significantly, for example in the fields of manufacture of electrical equipment, other manufacturing, and the manufacture of pharmaceutical products.

The investment performance of real estate activities realizing 17.5% of total investments, was also greatly reduced, by 12% y.o.y. Along with the moderate growth in dwelling constructions, developments oriented toward business facilities for rent dropped significantly.

The measure of decrease in the third largest field, transportation and storage accelerated (by 26%), caused mainly by the reduction of infrastructural developments. Moreover, investments of market-oriented enterprises engaged in transportation and storage also fell behind compared to Q3 2019

Investments up year-on-year in healthcare

Certain fields of the general government contributed differently to the performance change of the national economy’s investments. The volume increased by 2.1% in the case of the fourth largest investor, public administration. In connection with the epidemiological situation, through outstanding developments in the in-patient care area, the investments in human health and social work activities almost doubled (98%). In the arts, entertainment, and recreation – primarily due to the lower expenditure of competitive sport projects – investments decreased by 36%. In the case of water supply and waste management, the investment decrease of 21% surpassed the national economy’s average as well.

In the field of wholesale and retail trade, carrying the fifth-largest weight, investments increased (by 6.3%), where enterprises operating in wholesale trade, and in wholesale and retail trade and repair of motor vehicles and motorcycles increased their investments.

Investments in the sixth-largest field, agriculture, forestry, and fishing fell (by 5.6%), where mainly larger companies reduced their investment in domestically produced machinery.

Investment volume up in smaller branches of economy

In several smaller weight carrying branches of the national economy, developments have increased significantly, KSH says. Investments grew by 48% year-on-year in the energy industry, mainly through developments in nuclear energy. Investments in professional, scientific and technical activities have grown outstandingly (by 31%), mainly as a result of office developments executed in Hungary by service centers. Investments also grew moderately in the field of information and communication (3.4%) where the construction of telecommunication towers also played a role.

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