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Hungary Infrastructure Report Q2 2016

Hungary Infrastructure Report Q2 2016

BMI View: We expect slower growth in Hungary's construction sector from 2016 onwards as thegovernment's stimulus for the infrastructure sector comes to an end. EU funding will continue to support thesector - particularly strategic road and rail projects, although we caution the EU probe into cartelallegations in road construction could damage relations with a key financier in the EC.

Strong growth in Hungary's construction sector is not due to last long term, as we expect a rising fiscaldeficit to necessitate a drawback in public investment. Between 2016 and 2025, we expect constructionsector real growth to average 2.9% per year.

Latest Updates And Structural Trends

Civil engineering projects have been the primary drivers of the construction sector rebound, with roadand railway projects in particular, driving the civil engineering growth. However, in November 2015,civil engineering works decreased by 8.0% year-on-year (y-o-y), construction of buildings increased by10.2% y-o-y and the volume of construction output decreased by 0.2% y-o-y (Hungarian StatisticalOffice, January 2016).

A total of 962 development projects co-financed by the EU are currently delayed, business dailyVilaggazdasag published on November 4 2015. Citing cabinet office information, the paper stated that atthe end of Q315 the state sector and local councils were HUF150bn (EUR480m) behind schedule intaking up EU financing. The state body responsible for Hungary's schools had more than 80 projectsbehind schedule and the National Infrastructure Development Company had 50 delayed projects.

Budapest Transport Centre (BKK) projects were also significantly behind schedule. These delays causeda downgrade to our forecasts for the growth of the construction sector, resulting in real growth of 1.9% yo-y in 2016.


BMI Industry View
Table: Hungary's Construction Industry Forecast
Table: Hungary's Infrastructure Risk/Reward
SWOT
Infrastructure SWOT
Industry Forecast
Construction And Infrastructure Forecast Scenario
Construction And Infrastructure Forecast Scenario
Table: Construction And Infrastructure Industry Data (Hungary 2015-2025)
Transport Infrastructure - Outlook And Overview
Table: Transport Infrastructure Industry Data (Hungary 2015-2025)
Table: Transport Projects
Energy And Utilities Infrastructure - Outlook And Overview
Table: Energy And Utilities Infrastructure Data (Hungary 2015-2025)
Table: Energy & Utilities Projects
Residential/NonResidential Building - Outlook And Overview
Table: Residential and Non-Residential Building Industry Data (Hungary 2015-2025)
Table: Construction And Social Infrastructure Key Projects
Industry Risk Reward Ratings
Hungary - Infrastructure Risk/Reward Index
Rewards
Risks
Europe - CEE Infrastructure RRI: Heightened Risks Belie Growing Rewards
Table: Infrastructure Risk/Reward Index
Market Overview
Competitive Landscape
Table: EQS Data
Company Profile
Strabag Hungary
Vegyepszer
KÉSZ Building & Construction
Methodology
Industry Forecast Methodology
Sector-Specific Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Infrastructure Risk/Reward Index Indicators
Table: Weighting Of Indicators

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