Investment volume in Hungary rose by an annual 7.7 percent
Investment volume in Hungary rose by an annual 7.7 percent in the third quarter, edging down from a 7.8 percent annual increase in Q2, the Central Statistical Office (KSH) said on Monday.
KSH said the increase in investments can be explained by the dynamic activity of households and businesses and decreasing investments from the government. Developments in the manufacturing industry, the energy sector as well as housing construction increased, while investments related to transport, storage and agriculture held back economic performance.
Corporate investment climbed by 10.3 percent, picking up from a 3.0 percent increase in the previous quarter, helped by developments of foreign-owned companies. Public sector investment fell by 10.5 percent after growing by 3.0 percent year-on-year in the second quarter, as central government investments decreased significantly but local governments slightly increased their purchases of fixed assets, KSH said.
In the 3rd quarter of 2022 compared to the same period of the previous year:
- The volume of investment activity increased by 7.7%. Within it, construction investments representing almost two-thirdsof the performance value of investments increased by 10%, investments in machinery and equipment, accounting for more than one-third of investments grew by 3.3%. Within machinery investments, the volume of imported machinery grew, while that of domestically produced ones decreased.
- Among enterprises with at least 50 employees, accounting for 56% of investment output, the volume of developments grew significantly,by 10, where developments of foreign-owned enterprises played a prominent role. At the same time at budgetary units, which accounted for 11% of investments, the performance dropped by about one-tenth. While central government bodies saw their developments decreasing significantly, purchases of fixed assets by local governments slightly increased. Investment volume at other categories (enterprises with fewer than 50 employees, private entrepreneurs, non-profit enterprises as well as households) grew by 9.5%.
- Volume changes in investments over the reference period differed between sectors. Developments in manufacturing, representing the largest proportion (30%) of developments in the national economy, increased greatly (by 31%) in the third quarter, thus this area significantly supported the increase in the volume of investments. This was primarily due to the high-volume projects started in the previous periods in the field of electrical equipment manufacturing, but the revival of investments in vehicle production also played a role in the growth. Developments in the third major subsection, the manufacture of food products, also significantly exceeded the previous year’s value, in contrast , we measured a decrease in the production of basic metals and fabricated metal products.
- Investment performance of real estate activities, the second largest investor, accounting for one-fifth of developments in the national economy, grew significantly, by 17%, primarily due to the large increase in dwelling constructions as well as property renovations, which represent, jointly, a decisive weight.
- The decrease (-7.2%) typical of the previous quarter in the investment volume in transportation and storage continued, with the negative performance still mainly driven by a slowdown in public infrastructure developments.
- In the field of wholesale and retail trade investments increased by 3.7%, due to the fact – among others – that enterprises operating in wholesale tradeincreased their investments.
- After the significant expansion of the past quarters, the investment performance in agriculture, forestry and fishing decreased by 5.7% compared to the otherwise high base, wherethe the fact that larger companies dealing with stock-raising or crop production reduced their investment expenditure also played a role.
- In the 6th largest weight representing the energy industry section investments increased greatly, by about 45%, primarily due to the higher expenditure of public investments in the reference period.
