BMI View: Hungary's infrastructure market is relatively well developed and the country is open to foreign investment and overseas construction firms. Growth in the market has been restricted by the limited absorption of regional funding; however the bottleneck appears to be easing and a number of EU backed projects are now progressing, stimulating solid growth in construction industry value in 2017. Trends are also positive in areas such as residential construction where demand for new housing is rising, backed by a healthier credit market.
Forecast & Industry Developments
Hungary's Central Statistical Office has reported robust growth in new housing construction and the issuance of residential permits over the first half of 2017, with construction up 46% while permits have increased by 40%. At the same time demand for mortgages is rising rapidly and the National Bank of Hungary expects to see further (sustainable) gains in housing prices.
In the energy sector, while there is limited demand for new capacity due to slow consumption growth, Hungary's commitment to the further development of renewable energy does leave room for growth, particularly in the solar power segment.