What Awaits the Hungarian Construction Industry in 2024?

The construction industry faced a number of challenges in 2023, but market expectations suggest that even this year will not be a boom year, according to an analysis by financial portal portfolio.hu.

Last year, only a third of construction companies managed to increase their turnover compared to the previous year. Nearly half of the companies said that their turnover would fall in 2023 on an annual basis, while 20% said that last year would be flat. The National Federation of Hungarian Building Contractors (ÉVOSZ) recently pointed out that the vast majority of companies do not expect any growth in turnover this year due to the significant drop in public investment and the effects of the war between Russia and Ukraine.

As in the past, respondents to the latest survey cited a lack of orders as the main obstacle to their activities.

In the last months of last year, construction companies most cited insufficient demand due to falling private and public investment as the main obstacle to construction output, which is a growing problem. In addition, inflation, skills and labor shortages, and the unpredictability of economic regulation are among the factors that need to improve in order for market players to operate more efficiently. However, as frictions in supply chains have eased in recent years, shortages of raw materials and equipment are becoming less of a problem.

Construction professionals are no longer typically going abroad to work, but are increasingly changing their profession, which makes it impossible for them to return.

Last year, the number of people employed in the construction sector continued to rise, reaching 360,000, with foreign workers playing a role. However, the highest share of foreigners working in the Hungarian construction sector was not now, but between 2013 and 2017, when one in ten workers came from abroad. Now it is around 7%.