Hungary’s construction output climbs 35 pc in December

Output of Hungary’s construction sector rose by an annual 35.0 percent in December, albeit from a low base, the Central Statistical Office (KSH) said on Monday.

Output of the building segment rose by 28.9 percent during the period. Output of the civil engineering segment climbed 45.3 percent.

KSH said the output of the building segment was lifted by construction of homes, schools and cultural buildings, as well as of industrial facilities. In the civil engineering segment, construction of highways and railways supported the increase.

Commenting on the data, Economy Minister Mihály Varga said that the sector’s outstanding performance in 2017 was driven by the government’s home purchase subsidy scheme (CSOK) and the VAT cuts on housing.

The construction sector contributed 0.9 percentage points to the 2017 GDP, he said. The sector can become a driving force in the Hungarian economy in the near future, he said.

K and H Bank chief analyst Dávid Németh said high order stock points to continued strong growth this year, but capacity constraints, especially the labour shortage, could reduce the rate of increase. He put full-year growth at over 10 percent.

Takarékbank analyst András Horváth said the sector’s growth would continue, evident from the order stock and strong demand for both residential and office property. The impetus could be preserved if the government would extend preferential VAT rates for home construction, he added.

Source: MTI