KSH attributed the December drop to projects that wound up at the end of 2015, the deadline for spending grants available during the previous European Union funding cycle.

Road, railway and utilities construction companies were the ones that showed the biggest drop in output. In a month-on-month comparison, construction sector output grew by 1.4% in December according to figures adjusted for seasonal and workday effects.

Output of the buildings segment was down by 5.8% and civil engineering output dived 25.5%. In absolute terms, construction sector output reached 214.8 billion forints (EUR 695m) in December. Construction sector output dropped by 18.8% in 2016 as output in the buildings segment declined by 3.7% and civil engineering output was down by 33%

Analysts interviewed by MTI see considerable improvement in the sector in 2017. Péter Virovácz of ING Bank said the substantial increase in civil engineering orders suggests EUfunded infrastructure investments, among them road constructions can be expected to start again.

The question is whether home construction will continue to grow and how the construction sector will be able handle workforce shortage. László Balogh of ingatlan.com said activity on the home construction market will pick up this year and in 2018.

Republished with permission of Hungary Matters, MTI’s daily newsletter.