The output of construction companies in Hungary has fallen an average 5%-40% over the past year, the Hungarian Association of Builders (ÉVOSZ) reported on Monday.
ÉVOSZ said construction companies will work at 50% to 70% capacity this year, while companies involved primarily in apartment construction can expect to operate at even lower capacity.
The July 1 VAT hike could not be built into prices on Hungary's home market and also caused a drop in the stock of orders due together with difficulties in lending.
The stock of orders should increase 35% in the remaining months of the year, thus putting an end to the sector's declining performance by the end of 2009.
The builders' association said private investments nearly came to an end due to the crisis, while the number of local council of investments took a sharp downturn as well. Public orders were responsible for HUF 1,100 billion (€4.16 billion) in orders three years ago, compared to HUF 900 million projected this year.
Some companies are considering lay-offs or shutting down work for the summer. No companies expect to hire more workers for the high construction season in the summer and autumn.
Construction businesses expect demand to rise by the second half of 2010.
ÉVOSZ said construction export receives more attention from micro- and small enterprises. Businesses are mostly interested in work in Germany. (MTI-ECONEWS)