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Hungary's construction sector descends further

Sándor Laczkó
September 16, 2011

The long-lasting decrease in Hungary’s construction output also continued in July. The production volume the construction sector declined by 0.8% month on month in July, according to seasonally adjusted figures, the Central Statistics Office (KSH) has reported on Friday.

In the past 12 months, there were only four when the KSH reported an increase in monthly terms, so it is no wonder production was down 15.4% year on year, according to both unadjusted figures and data adjusted for working days. The sector’s output was 10.6% smaller in January-July that in the base period.

There is no stopping in the contraction of the sector’s output. The constant shrinking is attributable to subdued domestic demand and meagre lending activity. The sector’s performance does not reach even the 1999 level!

Within a decrease of 15.4% of the construction total, the output of both main groups of constructions decreased. In terms of volume, the construction of buildings went down by 14.9% while that of civil engineering works decreased by 18.3%, year-on-year.

According to seasonally adjusted indices, the construction of buildings was 0.6% higher than the level of the previous month, and that of civil engineering works decreased by 3.8% compared to June 2011. In the first seven months of 2011, the construction of buildings lessened by 9.3% and that of civil engineering works went down by 12.7% in comparison with January-July 2010.

The outlook remains bleak; orders data are still depressed. In July, the volume of new orders was 8.0% lower than in July 2010. Within this, new contracts for building construction decreased by 17.7%. New orders for civil engineering works grew by 0.7%. In the first seven months of 2011 the volume of new contracts decreased by one quarter.

(source: portfolio.hu)

Sándor Laczkó

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