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September 16th, 2019

Construction Industry: Production in the EU is Growing the Most in Hungary

Construction performance in Hungary increased by more than 35 percent compared to the same period last year. Therefore, it can be said that the sector performs better in Hungary than in Western Europe. The European Union as a whole declined in construction numbers in June and stagnated in the euro area on a monthly basis.

Construction production in Hungary is constantly increasing, said László Szarka, president of the Hungarian Association of Building Materials and Construction Products, on Kossuth Radio's Question of the Day. In June, construction of buildings increased by 23.5 percent and that of other structures by 16.5 percent. The construction of industrial and warehouse buildings, and of other structures, the construction of roads, railways, and utilities has resulted in growth in buildings. In June, the annual growth rate was 20.3 percent in the construction of buildings, 15.6 percent in the construction of other civil engineering works and 23.5 percent in specialized construction.

László Szarka also said that the construction industry in Hungary has just begun to recover from the crisis and is now beginning to stand firm.

For the construction industry as a whole, it accounts for a percentage of government institutional investment, followed by 20 percent for industrial investment in the private sector. The rest consists of new housing and renovations.

Further growth is expected

Growth will continue in the next six months, according to the specialist. However, some manufacturers expect a downturn next year, which will also be affected by the 5 percent house tax being phased out and will determine what will be replaced. Rural CSOK (Family Housing Allowance) is also an important factor, but it can only be considered later. He also noted that in some areas wages had risen by up to 65 percent.

The volume of commissioning also increased significantly, and last year the market exceeded the total value of three thousand billion forints in civil engineering, he added.

There is a great need for home renovations

There is a huge demand for home improvement, which is reflected in mechanical engineering. This is determined by a strict legal environment, for example, where professionals place much more emphasis on environmental and energy challenges. In his opinion, this is worth paying attention to since there is a big difference between used and newly built real estate today.

In the European Union

According to Eurostat's non-final data, construction output stagnated in June in 19 Member States of the euro area, and a 0.3 percent drop in construction output in 28 Member States of the European Union, compared to the previous month. Compared to the same period of the previous year, output in the euro area increased by 1.0 percent and in the EU as a whole by 0.6 percent.

In June, the largest decreases were reported in Slovenia (-6.7 percent), Romania (-2.8 percent) and Portugal (-1.4 percent). The strongest growth was recorded in Hungary (1.7 percent), France and the Czech Republic were also in the lead.

Compared to June of the previous year, Romania (+23.3 percent), Hungary (+20.2 percent) and Slovenia (+5.5 percent) posted the highest increases. Decreases were recorded in Slovakia (-2.1 percent), Great Britain (-2 percent), Sweden (-0.9 percent) and Belgium (-0.3 percent).

Data are incomplete as 12 countries have not yet been surveyed.

 

Sources:

1. Hirado.hu

2. VG.hu

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