ARTICLES LABELLED WITH TAG EBI

Hungary’s high construction activity start in Q1 2022 was followed by a slowdown in Q2 2022. The EBI Construction Activity Report has found that between this April and June construction works started at a value of around HUF 800 billion. Although the value of projects entering construction decreased in Q2, these are not low numbers at all as Activity Start has been the 5th highest (on a quarterly basis) of recent years. It should be added, though, that recently construction costs have dramatically increased, massively pushing up the Activity Start indicator calculated at current prices, while at constant prices the volume would be lower.

The Hungarian construction industry started off this year with an exceptionally high Activity Start indicator: nearly HUF 1,300 billion worth of construction works started in Q1 2022. The Activity Start of EBI Construction Activity Report in the first quarter is a new record (construction works have never started in such a high value in one quarter) and exceeded the level of Q2 2021 (the highest so far) by almost 37%. Yet, this spike is mainly thanks to the launch of two major infrastructure projects, according to the EBI Construction Activity Report, prepared by Buildecon, Eltinga (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database).

After a significant expansion in Q2 2021, the value of started construction works in the Hungarian construction industry marked a major drop between July and September. Yet overall, the Activity Start indicator remained high for Q3 2021 due to the exceptionally good second quarter, according to the EBI Construction Activity Report.

After a relative stagnation in previous quarters, Q2 2021 saw a considerable expansion in the Activity Start indicator of the EBI Construction Activity Report. It was the first three months of 2018 last that witnessed a higher value of construction works to start in a quarter. In H1 2021, projects entered the construction phase on a total of HUF 1,398 billion, marking a significant increase of 20% and 18%, respectively, against the same period of the previous two years.

The latest EBI Construction Activity Report has found that the stagnation of the total value of started construction works has not stopped. Between January and March 2021, construction works in the sector started on HUF 421 billion. This, although not greatly different from the values seen in the previous three quarters, is still the lowest Activity Start indicator of the last two years. Compared to the January-March periods of the previous two years, 2021 started clearly weaker: against the positive Q1 2020, the decline was about 35%, but even over the same period in 2019, there is a 15% decrease.

Due to the pandemic, the construction industry in Hungary last year registered a significant fall and the last quarter couldn’t save the year either. The latest EBI Construction Activity Report has found that Q4 2020, similarly to the low-value Q4 2019, saw the start of construction works at a value of HUF 442 billion. Owing to the massive drop in mid-2020, 15% less construction work started than in 2019 and 30% less than in 2018. In 2020 the Activity Start Indicator of the EBI Construction Activity Report accounted for less than HUF 2000 billion and the decline affected all major subsectors.

When assessing the first quarter of 2020, analysts of EBI Construction Activity Report Q1 2020 already highlighted the impact of the pandemic on the Hungarian construction industry. Back then, they did it with the help of a forecast based on limited available data, but since then actual data have been released and the impact of the pandemic on the sector can be assessed in detail.

The first quarter of the year 2020, mostly starting with mid-February, was marked by ominous economic forecasts. Thus, some decline in construction activity was to be expected, and indeed newly started construction projects dropped to just over €1.3 billion in Q1 2020. This amounts to a 14% decrease compared to the equivalent period of 2019, according to the latest edition of the EBI Construction Activity Report for Romania.

As the first coronavirus cases were registered in Hungary at the beginning of March, the effect of the epidemic on first-quarter figures might have been smaller. The epidemic may affect the construction industry in two ways. Projects that have already started may stop or may continue at a slower pace and it may hold back the value of projects entering construction phase.  Results show that there was a massive decline in the value of completed projects already in Q1 2020. The value of the Activity Completion Indicator of the EBI Construction Activity Report in the domestic construction industry decreased by 29% due to the epidemic, and several hundred projects were delayed.