Hungary’s construction sector fell by 12.3% in August year-on-year, highlighting the difficult economic situation facing the country. Although this decline was less than the 15.4% y-o-y monthly decrease recorded in July, it nonetheless reinforced the negative trend that has seen new orders in the building and construction segment register declines every month since October 2010.. Home building was the main factor behind this, with building output falling by 21.55% and civil engineering dropping by just 2.6%.
Hungary Infrastructure Market Report Q1 2012
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In October 2011, a rail line in western Hungary was renovated at a cost of HUF48.6bn. The railline is operated by regional player GYSEV, which is jointly owned by Hungary and Austria. An EU grant covered HUF41.3bn of the cost of the project. The investment has increased the speed of the trains from 60km/h to 120km/h.
In October 2011 MOL-CEZ European Power Hungary, the joint venture between Hungarian oil and gas company MOL and Czech peerCEZ, signed a construction contract with Spanish general contractor Tecnicas Reunidas. The contract is for the construction of a combined cycle gas turbine power plant (CCGT) at MOL’s refinery in Szazhalombatta, with the plant due to have a capacity of 860MW and an investment of EUR600mn (US$848.5mn). The joint venture has already attained all required permits for the construction of the plant, which is estimated to begin commercial operations in Q115.
Meanwhile, Lafarge and Strabag’s inauguration of a EUR270mn (US$373mn) cement plant in southwest Hungary has delivered a rare piece of positive news for the European cement industry, where firms continue to suffer the effects of the region’s economic malaise. That said, we believe the inauguration could well be a timely one, as it is in line with our view that Central and Eastern Europe (CEE) countries – having been some of the hardest hit by the global downturn – will see construction activity start to return to normal levels from 2011 and beyond.
One of area of potential is the energy sector. The announcement by Germany that it is to close it own
Nuclear power plants has lead to suggestions that Hungary could move into the vacuum created and become an exporter of electricity. Indeed, the expansion of Hungary’s nuclear power capacity is reportedly very much on the table, as although the upfront investment is sizeable, the cost-to-energy-unit is the lowest of all the major energy sources. However, one question is over who will pay for the investments in the nuclear sector. Whereas a gas plant can be constructed with state-subsidies, private investment is usually needed for Nuclear power plants.
- Executive Summary
- SWOT Analysis
- Hungary Infrastructure SWOT
- Market Overview
- Building Materials
- Global
- Industry Trend Analysis – Building Materials: China To Remain Demand Driver; Developed Markets Offer Little Support
- Europe
- Industry Trend Analysis – Building Materials: Short-term Weakness, But Recovery In Place
- Industry Forecast Scenario
- Table: Hungary Construction And Infrastructure Industry Data
- Table: Hungary Construction And Infrastructure Industry Data
- Construction and Infrastructure Forecast Scenario
- Transport Infrastructure
- Table: Hungary Transport Infrastructure Industry Data
- Table: Hungary Transport Infrastructure Industry Data
- Transport Infrastructure Forecast Scenario
- Transport Infrastructure Overview
- Major Projects Table – Transport
- Table: Major Projects – Transport
- Energy and Utilities Infrastructure
- Table: Hungary Energy and Utilities Infrastructure Industry Data
- Table: Hungary Energy and Utilities Infrastructure Industry Data
- Energy and Utilities Infrastructure Forecast Scenario
- Energy and Utilities Infrastructure Overview
- Major Projects Table – Energy and Utilities
- Table: Major Projects – Energy And Utilities
- Residential/Non-Residential Construction and Social Infrastructure
- Table: Hungary Residential and Non-residential Building Industry Data
- Table: Hungary Residential and Non-residential Building Industry Data
- Residential/Non-Residential Construction Forecast Scenario
- Residential/Non-Residential Construction and Social Infrastructure Overview
- Residential/Non-Residential Construction and Social Infrastructure
- Table: Major Projects – Construction And Social Infrastructure
- Business Environment
- Hungary Business Environment
- Rewards
- Risks
- Regional Overview
- Eastern Europe Infrastructure Business Environment Ratings
- Table: Regional Infrastructure Risk/Reward Ratings
- Company Monitor
- Strabag Hungary
- Vegyepszer
- KÉSZ Building & Construction
- Global Overview
- Infrastructure Finance In 2012: Déjà Vu?
- Methodology
- Industry Forecasts
- Construction Industry
- Data Methodology
- New Infrastructure Data Sub-sectors
- Construction
- Capital Investment
- Construction Sector Employment
- Infrastructure Business Environment Rating
- Table: Infrastructure Business Environment Indicators