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Amid increased credit activity and the unlocking of EU funds, the construction sector appears poised for a potential resurgence in the upcoming year, reports Magyar Nemzet.
Notably, in October of last year, construction output witnessed a marginal growth of 0.1% year-on-year and a more substantial 1% month-on-month, though overall performance had plateaued since June 2022.
The construction industry faces a challenging landscape due to a number of factors. The prevailing high-interest rate environment, coupled with economic deceleration, has led to a decline in investment across the competitive sector. Additionally, the retention of EU funds has added to the industry’s woes.
Examining the data, the volume of construction contracts has dipped significantly, registering a 31% decrease compared to the previous year.
Trends in the construction sector according to current data. Picture: KSH
This downturn is also mirrored in industrial output. As of October 2023,
construction output within the European Union experienced a 0.6% monthly decline and 0.4% annually.
The sector’s performance has been marked by month-on-month fluctuations, indicative of a hesitancy to invest driven by tight interest rates and economic uncertainty.
Some countries have demonstrated robust growth in construction output. Romania experienced an impressive 9.2% year-on-year increase, followed by Spain with 8.3%, Poland with 7.5%, and Slovenia with 7.2%. Conversely, France saw a decline of 3.3%, Belgium 3.5%, Sweden 4.6%, and Finland 7.3%.
The divergence in performance underscores the complex interplay of national economic factors. As the industry navigates challenges, the positive growth in specific countries suggests potential resilience. Factors such as increased credit activity and the utilization of EU funds may act as catalysts for a broader recovery.
Via Magyar Nemzet; Featured Image: Pixabay