The volume of Hungary’s construction output in February decreased by 11.7% compared to the January data, based on seasonally and working-day adjusted indices construction output. Aside from the unpleasant surprise of lower output, the volume of orders was also not very rosy. Nevertheless, it would be too early to give up on this year's outlook.
The 11.7% month-on-month drop also means that construction industry output was 16% lower than in February 2020. While the decrease or its degree are not nice, it should be noted that the beginning of the year has very low weight seasonally in annual construction output. As a result, monthly fluctuation can be high, and a single "lost" month should not ring any alarms in itself.
That said, the latest data from the Central Statistical Office (KSH) are not very encouraging and orders also dropped in February. The volume of new contracts decreased by 29.4%, within which the volume of new contracts for the construction of buildings fell by 25.4% and the volume regarding civil engineering was down by 33.6% compared to February 2020. As a result, the volume of February end-of-month stock of contracts at construction enterprises was just 0.4% higher than at the end of February 2020.
The weak orders are surprising because government projects have propped up the construction industry, and not even the coronavirus crisis appeared to affect it too much. (Also, February was the relative calm between the second and third waves.)
Construction industry outlook for this year is not bad, as the beginning of this year's EU transfers is expected to result in substantial demand. As such, the February figures should not be given too much significance, although the statistics for the following months will certainly be of interest even more than usual.
