In July 2017, construction sector output gained 22.7 percent year-on-year, and thus the sector’s dynamic growth, observed since the beginning of the year, has continued. The upward trend is expected to remain in place, as the volume of contracts concluded until the end of the month in the sector was up by 83.7 percent compared to the corresponding period of the previous year. Government measures, such as the Family Housing Allowance (CSOK) and reduced VAT on housing, have also invigorated the demand and supply sides of the sector.

Within the sector, output in the main categories, construction of buildings and civil engineering works grew by 15.1 percent and 32.4 percent, respectively, year-on-year. Growth in the former category was attributable mainly to the completion of private sector projects of building storage facilities, and to a lesser extent to the state-funded construction of sports and education facilities. Regarding the latter category, higher output was the result primarily of road-, railroad and public utility works. In 2016, the number of building permits rose, thanks to the CSOK scheme, to 32 thousand, two-and-a-half times higher than in the previous year, and the number of newly built homes was some 10 thousand last year.

In line with the Government’s expectations formulated in the Convergence Programme 2017-2021, the number of building permits for homes was up by 40.2 percent and that of newly built homes grew by 46.4 percent in the observed period. These data show that the dynamic expansion of the housing market has continued. In light of construction sector data from the Visegrad Four concerning the month of June and July, although the other countries of the bloc also show signs of a boom, Hungary’s output growth in the first half of the year was outstanding. The sector’s output was up by 8.6 percent since the average of 2010 and by 2.6 percent since the average of 2014 in Hungary. Backed by a higher inflow of EU funding and state projects, the sector has gained momentum and returned to a phase of steady growth.

(Ministry for National Economy)