According to the latest summer 2019 report by the Eastern European Construction Forecasting Association (EECFA), several of Hungary’s neighbors can expect “good years to continue,” a press release sent to the Budapest Business Journal suggests.
The report, published on June 24, focused on future trends up to 2021 for Southeast Europe (Bulgaria, Croatia, Serbia, Romania and Slovenia) and East Europe (Russia, Turkey and Ukraine) separately, observing an expected 6% growth in 2019 for Romania and an overall 15% cumulated real growth in the Balkan region by 2021. For the East Europe trio, the cumulated growth prediction is -1%.
For some of Hungary’s neighbors, such as Romania, Serbia, Ukraine and Slovenia, the report’s outlook is optimistic. It predicts Serbia’s “booming cycle” will reach new segments, with civil engineering taking charge in 2019, while Slovenia’s growth is expected to last at least until 2020. For Romania, construction demands will remain high, the EECFA found, although some delays might be caused by legal issues and policy changes.
Ukraine “has all the conditions for sustainable growth,” with estimated increases of 6.8%, 3.6% and 7.3% in 2019, 2020 and 2021, respectively, according to the report. The EECFA outlined that this positive trend is thanks to the state supporting industry through investments and changing some requirements for permits in the construction market.
In the case of another neighbor, Croatia, the predictions are not as positive. The country, according to the EECFA, is “at a crossroads,” and although sectors that lagged behind are expected to catch up, the “aging population, continued emigration, rising construction costs and increased international competition for tourists” will likely limit positive trends “unless wise political choices are made.”
For Turkey and Russia there are mixed expectations. The latter’s growth of 2.4% registered last year was “higher than expected” and mostly the result of projects related to the FIFA World Cup, the EECFA explained. Although after the event construction output hit near zero levels, the report still predicts 2.8-3.3% growth yearly until 2021, thanks to increasing state funding.
The case of Turkey seems to be the least promising. The country experienced many economic difficulties towards the end of summer 2018 after the “depreciation of the lira that greatly hit many sectors, especially construction,” the EECFA explained.
Moreover, the production of building materials plunged by 20%, a decrease mirrored in the fall in housing sales, according to the report. The EECFA outlined that “against this backdrop, recovery in the construction sector can only begin in 2021.”