At the construction-focused 91st EUROCONSTRUCT webinar, hosted by WIFO, the organisation’s Austrian partner, the construction market in the EUROCONSTRUCT region will see 3.8% growth this year. In Hungary, however, the decline may still remain, albeit to a much lesser extent than last year. The latest detailed forecast for the construction market of 19 European member states is available from Buildecon, the Hungarian member institution of EUROCONSTRUCT.
Expectations in the European construction market
The recovery in the European construction industry is faster than originally expected by the organization’s researchers and losses due to the epidemic are expected to be offset this year. According to the latest estimates, construction volume in EUROCONSTRUCT will increase by 3.8% in 2021, after a decline of 5.1% in 2020. Compared to previous forecasts, the decline was smaller than expected last year and will return to pre-crisis levels by 2022 at the latest.
In the EUROCONSTRUCT 19 countries, the overall rapid economic recovery is also beneficial for the construction industry in the context of significantly more favorable economic conditions. However, unlike in recent years, the construction industry is likely to show lower growth dynamics than the economy as a whole from 2022: the growth rates of the construction market in 2022 and 2023 are projected to be 3% and 2.1%, while the 19 countries its economy is expected to expand by 4.4 and 2% respectively over this period.
Country – specific derogations
With the exception of Denmark, Finland, Portugal and Sweden, the year 2020 brought a drastic decline in total construction output in the EUROCONSTRUCT countries. France, Ireland, Spain, the United Kingdom, Hungary and Slovakia experienced high single- or even double-digit declines. In the Scandinavian countries, the construction market was more resilient to the pandemic, with a positive growth rate in several countries. This is in contrast to the negative growth trend in Central and Eastern European countries, but here the Czech Republic and Poland survived last year slightly more easily. The continental and southern European picture is very heterogeneous. In France, construction performance plummeted, in Germany, growth was just below zero, as in Switzerland. Austria and Beegium were able to post moderate losses. Portugal was also able to detach itself from the negative dynamics of neighboring Spain. In the Anglo-Saxon countries as a whole, there was a very significant decline in 2020.
The recovery in the EUROCONSTRUCT countries is also very different and last year’s stronger losses will by no means be automatically offset this year. This is particularly evident in Ireland, Hungary, Slovakia, Spain and France, where total construction output plummeted last year and can only offset part of it in 2021. Ireland and Hungary predict a further decline by 2021. The situation is reversed in Portugal and the northern European countries (Denmark, Finland, Sweden, Norway): after last year’s robust positive result, further growth may come this year.
Growth in civil engineering has already been well above average in recent years, and by 2023 this sub-sector has the most promising growth prospects. Non-housing construction has been hit hardest by the crisis and this sub-market is expected to follow a relatively weak recovery path over the forecast horizon. Housing construction, on the other hand, is likely to continue to have a stable growth rate, but growth dynamics can be expected to decline markedly after 2021.
The situation in Hungary
Last year, the performance of the domestic construction market fell by 7.1% and Buildecon still expects a decline this year (-1.3%). By 2022, on the other hand, it could bring 7.9% growth, and in 2023 a similar amount of further expansion could come.
In the last three years, out of 19 EUROCONSTRUCT countries, construction costs have increased the most in Hungary. Between the beginning of 2017 and the end of 2020, the growth in Hungary was a total of 36%, while in the EUROCONSTUCT area as a whole the same figure is only 10% and in the V4 region only 12%. Currently, Buildecon expects the Hungarian market to increase costs above the average of EUROCONSTRUCT and V4 in the period 2021-2023 as well.
Source: Ingatlanhírek by ingatlanhirek.hu.
*The article has been translated based on the content of Ingatlanhírek by ingatlanhirek.hu. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!
*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.
*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!