Construction firms folded in March
The figures mark the continuation of a trend that started in 2006. Ever since, the output of the sector has fallen each year, with an annual dip of 10.1% recorded for 2010. Still, the rate of the decline is showing improvement considering that December, 2010 saw a yr/yr dip of 12.3%.
However, the association of construction companies ÉVOSz has grim expectations for the rest of the year, now projecting an industry-wide contraction of 6-10%. The group based its forecast on the trend that despite the slowing rate of negative output, the stock of new orders was halved from the same month a year earlier. KSH figures show that the aggregate stock of orders at the end of February was down 28.8% yr/yr, after a yr/yr slump of 21.7% yr/yr in January and a smaller, 13.3% yr/yr dip at the end of December.
The latest assessment also means that the outlook has deteriorated significantly over the course of two months, as ÉVOSz predicted a construction total of 2-3% at the start of the year.
The pressure is naturally causing a growing number of construction companies to fold. According to corporate information provider Opten, creditors and suppliers motioned liquidation against 334 builders in March a month-on-month increase of 11.3%. Nonetheless it marks a yr/yr drop of 7%. Last month, 569 construction companies were founded, a leap of 20% from February and up 10.3% from one year earlier, Opten said.
This article appeared in the BBJ's Office Market special report on April 22, 2011.