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Hungary’s Construction Industry To Face Challenges In 2015

Tamás Székely 2015.01.02.

The Hungarian Construction Industry Association (ÉVOSZ) expects the sector’s output to have grown an annual 15 % in 2014, due primarily to infrastructural investments, Tibor Tolnay, head of the association, said. At the same time, he said he considered next year’s outlook far more uncertain and noted the absence of private investors from the building construction segment.

Citing official statistics, Tolnay said Hungary’s industry’s output rose 10% from a year earlier to 1,774 billion forints (EUR 5.6bn) in 2013, though this still remained well behind pre-crisis levels. He attributed this year’s two-digit output growth to the acceleration of disbursements of European Union funding with the end of the last EU budget period, which generated more construction work. Most of this is related to infrastructural investments including road and railway construction and utilities development projects, he noted.

The latest construction sector report of the Central Statistical Office (KSH), which covers the January-October period, shows a 6.5% output decline in the building construction segment, while output of the civil engineering segment rose 35.2%. Looking ahead, new orders in the buildings segments fell 10.9% from a year earlier while new orders in civil engineering grew 16.8%. The building construction segment will not be able to grow until investors place orders for new offices and industrial facilities, Tolnay said.

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