Boston, MA -- (ReleaseWire) -- 06/10/2014 -- BMI View : The re-election of the governing Fidesz party on April 6 augurs for broad policy continuity and has not altered out fundamental outlook for Hungary's construction sector over the next few years. We maintain our view that a recovery in the sector has taken hold amid a steady improvement in macroeconomic conditions and fixed asset investment in particular. We are forecasting real construction industry growth of 2.9% in 2014 and 2.1% in 2015.
We expect growth over the next few years to be subdued and we are forecasting average industry growth of 2.0% between 2014 and 2018, with the country's weak business environment remaining a key drag on industry growth. Persistent weakness in the residential and non-residential sectors will also weigh on the wider sector's growth prospects.
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Key Trends And Developments
- We expect to see broad policy continuity from the Hungarian government, that is to say the country's policy making will remain erratic, following an overwhelming victory for the governing centre-right Fidesz party in the April 6 general election. We do not expect to see any shift in the government's policy stance in the months or years ahead, with Prime Minister Viktor Orb?n's programme of placing punitive taxes on publicly unpopular industries, such as banking, utilities and telecommunications, continuing to garner widespread support.
- There has been a pick-up in construction activity in Hungary during the past few quarters, driven primarily by government efforts to use funds, allocated by the EU, for infrastructure development. The country risked losing the funding if it were not used before end-2013 and the start of the new funding cycle. This drive has been reflected in improving quarterly growth numbers for the construction sector, which saw real terms year-on-year increases of 5.8% and 7.2% in Q213 and Q313 respectively. One project to go ahead is the modernisation of infrastructure around Lake Balaton (a popular tourist resort) - announced...
The Hungary Infrastructure Report features Business Monitor International (BMI)'s market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Hungary Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Hungarian infrastructure and construction industry.
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