Daily News Hungary economy

Budapest, March 16 (MTI) – Output of Hungary’s construction sector rose by an annual 8 percent in January, the Central Statistical Office said on Monday.

The rise followed a 2.2 percent drop, the first year-on-year drop in about two years, in December.

Based on seasonally and working day adjusted data, the sector’s output rose by 6.5 percent in January from December after two months of monthly drops.

In absolute terms, at current prices, output of the sector reached 88.9 billion forints (EUR 292m) in January.

Experts polled by MTI warned that construction growth could further slow in future, and pointed to a shrinking volume of contracts.

ING Bank senior analyst Andras Balatoni said that the portfolio of new orders showed a significant drop, and concluded that in the short term the construction sector could even shrink, while growth in the medium term will be slower than last year.

Balatoni said that in the past three years central projects had helped the sector, especially in 2014, but added that the effect of those schemes will gradually phase out. He said, however, that households’ confidence in the sector was high, and the retail property market would support construction in the second half of the year and in 2016.

K and H Bank senior analyst David Nemeth voiced a similar position, adding that public road and railway construction projects will not contribute to the sector as much as last year, and there was “no spectacular boom”.

Nemeth said he expected a 5-6 percent construction growth in 2015, as opposed to last year’s 14.2 percent.

Laszlo Koji, deputy head of construction federation EVOSZ, said that the total contract portfolio was 20.6 percent down from last year, which he attributed to “restrained” public orders. To produce an output of a total 2,000 billion forints this year, the sector would need accelerated procedures for EU financed projects and higher activity in private home construction and refurbishment.

EVOSZ predicts a 5 percent construction case this year in a best-case scenario, Koji added.

Source: http://mtva.hu/hu/hungary-matters

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