Budapest, December 16 (MTI) – Output of Hungary’s construction sector fell by an annual 7.8 percent in October, the Central Statistical Office (KSH) said on Wednesday.
The drop followed an 8.1 percent growth in the preceding month.
Output of the buildings segment rose by 18.4 percent in October but output of the civil engineering segment slumped by 23.5 percent.
In absolute terms, construction sector output came to 194.83 billion forints (EUR 617.2m).
In a seasonally and workday-adjusted month-on-month comparison, construction sector output declined by 7.6 percent.
Order stock of construction sector companies was down by 47.5 percent at the end of October compared to twelve months earlier.
New orders signed during the month rose by 4.1 percent as new orders in the buildings segment jumped by 83.4 percent but new orders in the civil engineering segment were down by 37.1 percent.
The increase in new building construction contracts is due to orders for sports facilities and industrial buildings, KSH said.
In January-October, construction output rose by 3.1 percent compared to the same period a year earlier.
Commenting on the data, Laszlo Koji, head of industry association EVOSZ, said the drastic fall in order stock has foreshadowed the drop in construction sector output. On their part they would be happy if sectoral output in 2015 could stay on the same level as last year.
ING senior analyst Andras Balatoni said sectoral output could significantly fall in the next three quarters due to lower output in the civil engineering segment. This can be attributed to fewer big infrastructural projects completed with funding from the European Union. Balatoni added that the first effects of lower VAT rates for home constructions could start showing in the second half of 2016 at the earliest.