![News Article construction economy Hungary report](https://cdn.property-forum.eu//image/articles/18570/1500/construction_crane-604.jpg)
The 11% month-on-month jump also means that construction output was 15.6% higher than a year earlier. However, this does little to help us see a clearer picture, as the sector's output is so erratic from month to month that the annual indices are highly volatile due to base effects and large fluctuations in the period under review. The fixed base time series may be a little more informative, but there are plenty of question marks.
The downward trend in construction for two years would be difficult to read into the (highly volatile) data of recent months. The sudden increase does not fit well into the picture that has emerged over the last period based on the information provided by the sector players and the economic environment.
It is generally agreed in the industry that the economic conditions in the sector, which is suffering from high interest rates, the loss of EU funds, tight domestic demand and public spending cuts, are very poor. On this basis, experts predict a particularly weak year for the sector, which shrank by 5% last year.
However, the numbers are providing less and less evidence of this. Unfortunately, the Central Statistical Office (KSH) does not provide any guidance on whether this might be a one-off effect of the completion of one or two large projects (the stronger-than-expected data in previous months were mostly attributed to this by experts), so we can rely on the few partial data that are available.
Accordingly, both buildings and civil engineering expanded (on both an annual and monthly basis) in April, and the specialised construction sub-sector also showed a good performance. This suggests that the increase was not necessarily due to the activation of a single high-value investment.
Weak demand is becoming less and less visible in the orders figures. The volume of new contracts concluded grew by 23.0%. Within it, the volume of contracts for the construction of buildings increased by 16.5%, that for civil engineering by 30.9%, year-on-year. The stronger order intake in recent months is also adding to the overall order book. The volume of the end-of-April stock of contracts at construction enterprises lessened by 0.5% compared to the same period of the previous year, within this, the volume of contracts was up by 1.1% for the construction of buildings and decreased by 2.0% for civil engineering works.
Nor do these forward-looking figures suggest that the construction sector is heading for a further downturn. Of course, we can produce an order index that is less sensitive to base effects and price changes, and it doesn't look as compelling. For example, we don't see a turnaround in the value of orders relative to monthly production.
For the time being, the construction sector is performing much better than expected in the first third of the year. However, the reasons for this welcome development and the outlook are very unclear, so we have no choice but to wait for the data in the coming months, which may help us to get a clearer picture of the situation in the sector.