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Hungary construction output up in Nov but still on declining trend

Hungary’s performance in the construction industry improved in November, but this does not indicate an end to the decline that has been taking place in the sector for the past five years, Laszlo Koji, deputy head of building sector association EVOSZ, said on Monday, after the Central Statistics Office (KSH) published fresh data on the sector.

He expects no turnaround this year but projects some growth in the sector’s output in 2013.

Output of Hungary’s construction sector was up 3.6% in November from the same month a year, lifted by road and railways renovation projects from a very low base, the Central Statistics Office (KSH) said on Monday. Output rose 7.3% according to seasonally- and workday-adjusted figures from October as a result of a 16.6% rise in the construction of buildings and 2.3% rise from October in the civil engineering segment.

Prospects for 2012 are no better than last year, with the sector currently holding HUF 1,142bn worth of contracts, Mr Koji added. The order stock fell by more than a third in twelve months in volume terms.

Almost all new investments are financed with EU funding worth about HUF 1,200bn this year and the next, he said.

Gergely Suppan of TakarekBank noted this is the first time the sector’s output rose after a long period in November although he did not exclude further decline in the coming months. The analyst said output increased mostly due to road and railway constructions, although the decline in buildings constructions also slowed. The fall in building permits also slowed, he said.

Based on the construction figures, investments could have been favourable in the fourth quarter of last year, giving some hope that the country is averting a recession, Mr Suppan said.