Fast Market Research recommends "Hungary Infrastructure Report Q1 2014" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 01/01/2014 -- All-round optimism in Hungary - particularly on the macroeconomic front and from the construction sector - has led us to revise up our outlook for the Hungarian construction industry. We have changed our 2013 forecast from stagnant growth (which we expected last quarter) to real growth of 3.5% year-on-year (y-o-y), which will be followed by 2.2% y-o-y in 2014. Although the industry will post annual average growth of 2.0% over the forecast period to 2022, we see little likelihood of the industry value recovering to peak levels reached in 2005. Continued weakness in the residential and non-residential construction sub-segment is to be blamed for this lacklustre recovery.
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According to estimates from the Hungarian statistical office, the Hungarian construction sector posted 6.2% y-o-y growth during the first seven months of 2013. Broader macroeconomic indicators also point towards the ongoing recovery in the economy. Y-o-y real GDP growth turned positive in Q213, expanding by 0.5%, the first such y-o-y expansion reading since Q411, and has prompted us to revise up our forecast for real GDP growth in 2013, 2014 and 2015 to 0.3%, 1.7% and 2.1% respectively from -0.1%, 1.1% and 1.9% previously.
Over the 2013-2017 period, we expect the infrastructure segment to increase its contribution to the construction industry value from 44.4% to 47.0% by 2017. Meanwhile, growth in the residential and non-residential sector will average 0.6% y-o-y between 2013 and 2017, as investment in non-residential buildings picks up.
Key areas of growth in the sector are:
- Commitment To Transport Spending: The biggest growth opportunity for the country's transport infrastructure is the support given by the EU to drive the modernisation of Hungary's road and rail links and improve freight transport throughout the country. We expect growth in the railways sub-sector to outpace growth in the overall transport segment. In October 2013, MAV, the Hungarian State Railways, revealed its plans to modernise railway network around Lake Balaton in the Transdanubian region. The project, which will involve the rebuilding of the 29km line between Lepseny and Zamardi, will also be financed by the EU. Meanwhile, the modernisation of the 56km line between Zamardi and Balatonszentgyorgy has received clearance and will be funded from the 2014-2020 EU budget.
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