Hungary Construction Market Predicted To Show 10 Percent Growth In 2014
News Posted On: 07 May 2014
The Hungarian construction sector is anticipated to spiral upwards between 2014 and 2019, due to numerous proposed tenders from non-residential and civil engineering sectors. Tenders related to environmental protection and transportation infrastructural developments have recently shot up, and the next few years look promising for the construction sector.
Construction sector forecasts in Hungary for 2014-2019
Research and analytic company, PMR recently published a report forecasting developments in Hungary during the 2014-2019 period. The report reveals that construction output in Hungary recovered by 10 percent after showing a year-on-year fall of nine percent during 2012. A major portion of the growth stemmed from transport related infrastructural developments, while being aided by an increased EU funding absorption as the funding bracket in EU ended during 2013. Furthermore, the report forecasts a similar growth trajectory during 2014, predicting an improvement of 10 percent in the construction sector.
The report also points out factors that can be favourable to the construction market like rise in orders tendered to construction companies, launch of EU's six-year funding program, efforts made by the government to improve the civil-engineering construction tendering process, renewal of government plans aimed at retrofitting housing properties and propitious construction plans based on environmental protection.
The report analyzes factors that could adversely affect the predicted growth like: government orders to limit retail development, negative consumer confidence, continued building permit paucity and depressed financial state amongst construction companies.
Road construction projects boost construction industry
Road construction was one of the primary sectors that drove the construction industry forward during 2013. 2013 saw public tenders of the order €1.6 billion being organized in the road construction sector. The finalized contract price volumes reached nearly €1.4 billion by the year's end. The plans catered to motorways(30 km), expressways(70 km), bypasses(70 km), road reconstructions(388 km) and roundabouts.
The road construction sector is expected to fuel the construction industry's growth in the coming two years as well. Road upgrades already have reserved funds of the order €415 million for 2014. A few significant projects that are in the pipeline area motorway between Romania's border and Mako that stretches up to 23 km, a 11.9 km long motorway between Vasarosnameny and Or, and Abony-Fegyvernek M4 motorway.
Residential construction sector remains subdued
Residential construction activity has been depressed due to reduced consumer confidence and investor appetite in the housing market. There were no prime residential projects announced during 2013, even despite incentives provided through government plans to revive the housing market. However, the renewal of the 2009-suspended retrofitting program is expected to aid the housing sector. Analysts say that the residential sector construction output will take years of commitment and involvement from construction developers to bring it back to its previous vigor.
Meanwhile, non-residential construction projects are growing in number, indicating that a recovery may be in the offing during 2014 or 2015. The growth of non-residential sector depends on the effects of Europe's debt crisis on the Hungarian economy and buyer sentiment in the wake of governmental decisions and the political scenario.
Written by Les Calvert
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