The outlook for the Hungarian construction industry looks relatively moderate compared to its performance during the previous five years, according to a report by Timetric’s CIC. The industry’s output value will post a CAGR of 2.74 over the forecast period (2016 ¬ 2020) in real terms, which has decreased from 3.55% during the review period (2-11 – 2015).
The construction industry in Hungary posted positive growth during the last five years, although construction was weak in 2012, due to the economy being hit by a recession and limited business confidence adversely affecting investments. Driven by an improvement in economic conditions and new investments in construction projects, the industry has since recovered.
Over the forecast period,the industry’s growth is expected to slow in pace. It will be supported by government efforts to improve transport infrastructure and develop regional connectivity. Plans to increase the nation’s energy production are also expected to support funding in energy infrastructure projects. Consequently, the industry will rise from a value of US$10.4 billion in 2015 to US$11.9 billion in 2020, measured at constant 2010 US dollar exchange rates.
The report finds that infrastructure construction was the biggest market in the Hungarian construction industry, accounting for 36.2% of its total value in 2015. It is expected to increase in importance over the next five years, although marginally, to account for 37.3% of the industry’s total value in 2020. Infrastructure construction will be mostly driven by government investments under the Integrated Transport Development Operational Programme (ITOP), under which it will allocate US$3.7 billion to develop the country’s road and rail infrastructure. As a result, it will be the fastest-growing market in the industry, with a CAGR of 6.08% in nominal terms, to value US$3.9 billion in 2020.
Accounting for 16.1% in 2015, energy and utilities construction is forecast to remain the second-largest market in the industry during the forecast period. The market will be fuelled by government initiatives to boost the country’s energy production. Efforts to promote the use of renewable resources have resulted in the National Renewable Energy Action Plan (NREAP), which aims to generate 14.7% of the country’s total energy mix from renewables by 2020. Various pilot projects are also underway, and fiscal incentives in the form of feed-in tariffs are being offered to developers. The market is forecast to post a nominal CAGR of 4.27%, to value US$1.6 billion in 2020.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/europe-cis/27062016/outlook-for-hungarian-construction-industry-looks-moderate-406/