Output of Hungary’s construction sector rose by an annual 15.1% in May, the Central Statistical Office (KSH) said. Output of the building segment rose by 8.8% during the period. Output of the civil engineering segment climbed by 23.7%.
KSH said output of the building segment was lifted by the construction of industrial facilities. In the civil engineering segment, construction of highways, railways and utilities infrastructure supported the increase. In a month-on-month comparison, output was up 6.1%, adjusted for seasonal effects and the number of working days.
Commenting on the data, the information and technology ministry’s deputy state secretary said that clients’ trust puts the sector in a good position. Fully 3,400 new flats were completed in the first quarter of 2018, Gyula Pomázi noted. Further, 72,000 families have applied for government-funded family home subsidies (CSOK) worth about 205 billion forints in total, which forecasts further growth, he said. Construction companies have also launched equipment developments, which also points to expansion, Pomázi said.
Takarékbank analyst Gergely Suppan said that next to the boom in housing, office space and commercial real estate, government investments also drive the sector’s growth. Forecasts are good, he said, although lack of capacity on the contractor side hinders completion of orders.
K+H Bank analyst Dávid Németh warned that lack of capacity and work force risk that prices in the sector rise. With the interests on loans growing, this could make selling houses difficult, he said. The sudden jump in stock orders may prompt companies to expand capacity, which may end up unused once the present wave of developments end, he said.