In October 2016, construction sector output was up by 38.1 percent year-on-year, which figure is almost as high as the growth rate of 38.3 percent in May, Minister for National Economy Mihály Varga said, commenting on the latest data released by the Hungarian Central Statistical Office (KSH).

The fact that the volume of contracts for the construction of buildings rose by 113 percent year-on-year shows that the sector is set to expand further. The positive trend is underpinned by the Housing Allowance Scheme and preferential VAT for the sector, he added.

Speaking of growth components the Minister said that the construction sector was expanding in a steady and sound manner, as output had increased in both main sub sectors.  The 27.3 percent output growth in the construction of buildings was the result mainly of industrial facility, housing, office and educational building projects. In the other main sub sector, the construction of civil engineering works, the 51.7 percent output growth stemmed mainly from the building of motorways and the modernization of railways, the Minister stated.

The Housing Allowance Scheme was a significant driver of the increase in the number of building permits issued already last year, as this indicator showed a two-and-a-half fold increase (to 32 thousand). As expected, the scheme has fuelled growth also this year: in Q1-Q3 2017, the number of building permits for homes increased by 32.7 percent year-on-year, and the number of newly built homes was up by 51.5 percent, Mihály Varga announced.

The performance of the sector is also remarkable when analysed on a longer time horizon: since 2010, output has risen by 23.5 percent. Data are encouraging even when compared to the average performance of 2014: since then output has increased by 16.7 percent and this rate of growth has placed Hungary on top of the ranking with the region, the Minister said.

(Ministry for National Economy)