Hungarian construction industry couldn’t pull itself together in Q3

In Q3 2020 the share of Budapest and Greater Budapest in the Activity Start of multi-unit housing construction slightly dropped against the high numbers of previous quarters, sinking to the average level of previous years. Yet, it remained high for the first 9 months.

2020 brought a massive decline not seen since 2015 in the value of started office projects. In the first 9 months of this year projects started only in the value of HUF 72 billion. After the weak Q1, Q2 brought some expansion, but Q3 again saw a lower Activity Start, with projects entering construction phase on only HUF 26 billion. For example, Phase I of H2Offices (Water Skanska) entered construction and the renovations works of Városmajor 12 office building started. Office building developers may also be uncertain about the impact of the pandemic on office usage habits. It is not yet clear whether the current rise of teleworking will transform demand for offices in the long run. At the same time, there was no shortage in completions in 2020, the value of Activity Completion indicator amounted to HUF 159 billion, the highest value during three quarters. This year has seen, for example, the completion of BudaPart GATE C office building, Arena Business Campus Building A, Agora Tower, Agora Hub, and the buildings E and F of Váci Greens.

Q3 saw some decline over the previous two quarters in the start of plant and warehouse projects (which is treated as one segment as per the methodology of EBI Construction Activity Report). In total, in the first 9 months of 2020, construction works in the segment started on HUF 263 billion, up 11% from the year-ago period. This, however, was only thanks to the strong start of the year. 2020, for example, saw the construction start of M0-M31 warehouse, Samsung’s battery plant (Göd), JYSK’s new logistics and distribution centre (Ecser), LIDL’s new logistics hub (Ecser), Caadex steel structure production hall (Komló), and Phase II of the vegetable oil refinery plant (Foktő).

Original article in Hungarian: Tünde Tancsics, ELTINGAEnglish version: Eszter Falucskai, BUILDECON

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