Output of Hungary’s construction sector climbed 24.4 percent year-on-year in August, data released by the Central Statistical Office (KSH) on Monday show.
Output of the buildings segment was up by 10.1 percent, lifted by construction of factories, stores and homes, KSH said. Civil engineering output increased by 46.8 percent, supported by road, railway and utilities projects, it added.
In a month-on-month comparison, construction output rose by 1.9 percent, adjusted for seasonal and workday effects.
For the period January-August, output was up by an annual 22.6 percent.
In absolute terms, output stood at 327.9 billion forints (EUR 1bn) in August and 1,864.9 billion forints in January-August.
Order stock in the sector was up by 58.8 percent at the end of August from twelve months earlier. Stock rose by 1.7 percent in the buildings segment and by 79.8 percent in the civil engineering segment.
New order volume was up by 4.3 percent as new orders for buildings rose by 13.5 percent, but civil engineering orders fell by 4.4 percent.
Analyst András Horváth of Takarékbank said construction sector output growth could continue to accelerate in the coming 18 months but after that home construction growth should slow down significantly due to the phasing out of the preferential VAT rate on home construction at the end of 2019.
Takarékbank’s analysts project more than a 20 percent output growth in the sector in 2018 and around 15 percent in 2019.
Dávid Németh of K and H Bank said construction sector growth is driven by EU-funded infrastructural investments, home construction and commercial property developments, adding that the growth rate of the order stock has been declining since May in the building construction segment and since December in civil engineering. He also noted that the base figures are already high.
Featured image: MTI