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Monday, October 22, 2007

Hungary Construction Output August 2007

According to data released last Friday by the Hungarian Statistics Office, in August 2007 the volume of construction activity in Hungary decreased by 15.3% when compared with August 2006 according to unadjusted indices, and by 14.4% according to indices adjusted for working days. In the first eight months of 2007 output was down by 7.3% when compared with the same period of 2006. In comparison with the previous month production decreased by 0.8%, according to indices adjusted seasonally and for working days.

What is evident from this data is that the Hungarian construction industry is in deep depression, and given what happened in the global banking sector in August, and the impact that this is likely to have on construction activity, this depression is unlikely to come to an end anytime soon.

At the more detailed level the output of complete constructions and civil engineering decreased by 21.2% over August 2006, while building installation decreased year on year by 7.2%. Completed buildings, on the other hand, only went down by 2.3%.

According to unadjusted indices the construction of whole buildings decreased by 5.6% and that of civil engineering fell by one quarter when compared with August 2006.

The stock of orders pending at the end of August was down by 40% on August 2006. Within this total, the stock of orders for building construction decreased by 13.6% while that for civil engineering was down by 54.4%. The volume of new orders was down by 15.1% on August 2006.

Now we really need to take a hard look at the Q3 2007 GDP data so we can see what is really happening here.

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