Hungarian Construction Industry: Still Going Down, Negative Outlook

According to the latest data released by HSCSO today (pdf), in November 2009, the volume of construction activity decreased by 14.5% according to both unadjusted indices and to ones adjusted for working days compared to November 2008. In the first eleven months of 2009, output decreased by 4%. According to indices adjusted for seasonality and working days the production in November was 9.6% lower than in the previous month.

The number of total orders shows a bit of confusion, as a lot of companies went into insolvency and the remaining has relatively high orders. Also, a lot of relatively large projects were completed in 2009 and smaller ones are being built. Problems of financing and the disruption in the supply chain causes delays. However, the ultimate outlook is negative: The volume of new orders in November was 21.3% lower compared with the previous year. Within this, new contracts for building construction decreased by 1.6%. New orders for civil engineering works fell by 36.3%, compared with November 2008, highlighting the disastrous effect of Hungary's spending binge during growth and crippling pro-cyclical public spending in the recession.