2013-12-24 21:36:35 - Recently published research from Business Monitor International, "Hungary Infrastructure Report Q1 2014", is now available at Fast Market Research
All-round optimism in Hungary - particularly on the macroeconomic front and from the construction sector - has led us to revise up our outlook for the Hungarian construction industry. We have changed our 2013 forecast from stagnant growth (which we expected last quarter) to real growth of 3.5% year-on-year (y-o-y), which will be followed by 2.2% y-o-y in 2014. Although the industry will post annual average growth of 2.0% over the forecast period to 2022, we see little likelihood of the industry value recovering to peak levels reached in 2005. Continued weakness in the residential and non-residential construction sub-segment is to be blamed for this lacklustre recovery.
According to estimates from the Hungarian statistical office, the Hungarian construction sector posted 6.2%
y-o-y growth during the first seven months of 2013. Broader macroeconomic indicators also point towards the ongoing recovery in the economy. Y-o-y real GDP growth turned positive in Q213, expanding by 0.5%, the first such y-o-y expansion reading since Q411, and has prompted us to revise up our forecast for real GDP growth in 2013, 2014 and 2015 to 0.3%, 1.7% and 2.1% respectively from -0.1%, 1.1% and 1.9% previously.
Full Report Details at
- www.fastmr.com/prod/754538_hungary_infrastructure_report_q1_2014 ..
Over the 2013-2017 period, we expect the infrastructure segment to increase its contribution to the construction industry value from 44.4% to 47.0% by 2017. Meanwhile, growth in the residential and non-residential sector will average 0.6% y-o-y between 2013 and 2017, as investment in non-residential buildings picks up.
Key areas of growth in the sector are:
* Commitment To Transport Spending: The biggest growth opportunity for the country's transport infrastructure is the support given by the EU to drive the modernisation of Hungary's road and rail links and improve freight transport throughout the country. We expect growth in the railways sub-sector to outpace growth in the overall transport segment. In October 2013, MAV, the Hungarian State Railways, revealed its plans to modernise railway network around Lake Balaton in the Transdanubian region. The project, which will involve the rebuilding of the 29km line between Lepseny and Zamardi, will also be financed by the EU. Meanwhile, the modernisation of the 56km line between Zamardi and Balatonszentgyorgy has received clearance and will be funded from the 2014-2020 EU budget.
* Pipeline Projects: A number of international natural gas pipelines passing through the country have the potential to bring substantial investment in the Hungarian energy and utilities segment. Hungary has itself invited bids from both foreign and domestic companies for seven new exploration licences: four for hydrocarbons and three for geothermal exploration. This is part of the government's attempt to ease dependence on imports. Hungary imports most of its supplies from Russia. Meanwhile, the Hungarian nuclear power segment could expect South Korean participation as a result of bilateral nuclear cooperation agreements signed between Hungary and South Korea in October 2013. This is particularly encouraging news for the energy segment as there has been considerable uncertainty and doubt about who would pay for investments in the nuclear sector.
The improved outlook for the overall construction sector puts strong upside risks to Hungary's performance in BMI's Infrastructure Risk/Reward Ratings for Central and Eastern Europe. It is ranked 10th in our ratings table, with a score of 54.6 points - below the regional average of 55.6 points. The business environment renders Hungary relatively unattractive to investors compared to its regional peers, especially given high taxes on corporations - notably those which are foreign-owned.
Report Table of Contents:
BMI Industry View
- Infrastructure SWOT
- Construction And Infrastructure Forecast Scenario
- Table: Hungary Construction And Infrastructure Industry Data, 2011-2016
- Table: Hungary Construction And Infrastructure Industry Data, 2017-2022
- Transport Infrastructure - Outlook And Overview
- Table: Hungary Transport Infrastructure Industry Data (2011-2016)
- Table: Hungary Transport Infrastructure Industry Data, 2017-2022
- Major Projects - Transport
- Table: Major Projects - Transport
- Energy And Utilities Infrastructure - Outlook And Overview
- Table: Hungary Energy And Utilities Infrastructure Industry Data, 2011-2016
- Table: Hungary Energy And Utilities Infrastructure Industry Data, 2017-2022
- Table: Major Projects - Energy And Utilities
- Residential/NonResidential Building - Outlook And Overview
- Table: Hungary Residential and Non-residential Building Industry Data, 2011-2016
- Table: Hungary Residential and Non-residential Building Industry Data, 2017 - 2022
- Major Projects Table - Residential, Non-Residential Construction And Social Infrastructure
- Table: Major Projects - Residential, Non-Residential Construction And Social Infrastructure
Industry Risk Reward Ratings
- Hungary - Infrastructure Risk/Reward Ratings
- Central And Eastern Europe - Infrastructure Risk/Reward Ratings
- Table: Central And Eastern Europe Risk/Reward Ratings
- Competitive Landscape
- Table: EQS Data
- Strabag Hungary
- KESZ Building & Construction
Global Infrastructure Overview
- Global Industry Overview
- Table: Latin America PPP Round-Up
- Industry Forecast Methodology
- Sector-Specific Methodology
- Risk/Reward Rating Methodology
- Sector-Specific Methodology
- Table: Infrastructure Risk/Reward Rating Indicators
- Table: Weighting Of Indicators
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