Hungary Construction Suffers Major Setback

The 15.7% year-on-year setback has been the worst in more than 2 years; the last slump on a similar scale occurred in early 2008.

Slump on all fronts

April saw construction industry output shrink yr/yr in both major product groups of the industry. The overall 15.7% slump is due to 13.3% decline in building construction while the volume of heavy and civil engineering projects fell a striking 18.2% year-on-year, the Central Statistics Office reported.

Compared with the March output, seasonally adjusted data reveal declining activity levels in both categories. The construction of buildings witnessed 15.5% decrease; heavy and civil engineering went 1.7% down month-on-month. In the 4 months to April, the corresponding yr/yr data in these categories was 12.1% and 11.8% negative growth respectively.

Out of the 3 segments of the construction industry, April 2010output in the construction of buildings increased by 3.9% while that of civil engineering was down 15.6% compared to April 2009. The division of specialized construction works, which consists mainly of building installation and completion, witnessed a dramatic decline of 27.4%.

Increasing volume of orders

The volume of new orders received in April was 17.1% lower than the corresponding March data. Within this, new orders for civil engineering projects plummeted by more than one-third, however this was partly offset by a 18.5% increase in new orders for building construction. The overall volume of new orders received in the first 4 months of the year 2010 was 17.5% higher than a year earlier.

Orders at the end of April 2010 totalled 3.2% over the April 2009 data. Within this, the total volume of contracts for building construction increased 9.1% while those for heavy and civil engineering dropped 1%."

Source: Portfolio Online Financial Journal