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Hungary investment volume drop slows to 5.4% yr/yr in Q3

Investment volume in Hungary dropped 5.4% yr/yr in the third quarter of this year and was down 0.4% according to seasonally adjusted figures from the second quarter, the Central Statistics Office (KSH) said on Wednesday.

Both the yr/yr and the quarter-on-quarter drop was slower the respective 6.5% and 2.4% declines in Q2.

Investment volume dropped yr/yr now for the 15th quarter in a row.

KSH figures show quarter-on-quarter rises in 2008 and rises and drops varying since the beginning of 2009.

Investment into machinery, equipment and vehicles rose a sharp 21.9% yr/yr after a 4.5% increase in Q2 and a 4.2% increase in Q1. It fell 1.4% in the full year of 2010.

Construction-type investment fell, in contrast, 21.2% from a year earlier after a 13.7% decline in Q2 and a 8.0% decrease in Q1. The declines followed a 8.3% contraction last year.

In a composition by main branches, manufacturing sector investments in the third quarter were up a steep 27.3% yr/yr, and a similar-size rise in Q1-Q3 reflecting rising investments in vehicle manufacturing, equipment and machinery production, metal processing, in pharmaceuticals and chemicals manufacturing, KSH said.

KSH explained a similar sharp: 28.3% rise in Q3 investment in the public administration and social insurance sector to rising expenses related to flood protection and to the cleanup of the toxic sludge resulting from Hungary’s worst environmental disaster in the autumn of 2010. Q1-Q3 investments in the sector fell, however, almost 10% yr/yr.

Investments in the health and social work branches rose 37.7% in Q1 and 43.9% in Q1-Q3.

Investments in the other main sectors continued to decline, including a 12.1% yr/yr drop in transportation and storage, reflecting significantly lower investments into motorway renovation and construction and in railway transport and pipeline freight.

A sharp yr/yr drop - of 26.6% in Q3 and 21.9% in Q1-Q3 - of investments in real estate activities reflected a continued steep drop of home construction as well as commercial property developments.

The decline of investments deepened to 26.0% yr/yr in Q3 in the financial and insurance sector, whereQ1-Q3 investments were down by 11.7%. The yr/yr decline was 9.2% in Q1 and 19.1% in Q1-Q3 in information and communication.

The drop of investments in accomodation and catering slowed to 7.5% yr/yr in Q3.

Investment in the first three quarters was down 4.5% from the same period of 2010.

Except for a 0.3% rise in 2007, investments in Hungary fell in volume terms each year since 2006.