The Hungarian construction industry is projected to grow at a compound annual growth rate (CAGR) of 2.74% from 2016 to 2020, supported by developments in transport infrastructure and regional connectivity, says a report by Timetric.

Titled ‘Construction in Hungary – Key Trends and Opportunities to 2020‘, the report states that Hungary’s construction industry will grow at a slower pace after suffering a previous setback. Being a landlocked country, Hungary requires an exceptionally well-developed network of roads to transfer goods and people. The country’s location will have a crucial impact on the expansion of the construction market.

The local authorities have initiated steps to improve the road infrastructure after it was revealed that roads accounted for 84.8% of the movement of goods in 2015. The logistics industry in the country is largely dependent on road and rail with an improvement of 1.6% recorded in the total volume of goods transported within the country in 2015.

“The growth in the construction sector will be influenced by the need for an effective and efficient road infrastructure.”

The growth in the construction sector will be influenced by the need for an effective and efficient road infrastructure. An Integrated Transport Development Operational Program (ITOP) has also been launched by the authorities for promoting improvement and development of the transport infrastructure.

According to the Timetric report, the growth in the industry will also be boosted by improved consumer and investor confidence leading to an increase in investments in different sectors including infrastructure, energy and utilities, and commercial construction projects.

Authorities have also initiated development schemes in other sectors, such as the Environment and Energy Efficiency Operational Program (EEEOP), National Renewable Energy Action Plan (NREAP) and Family Housing Allowance Program (CSOK), which will support industry growth.

The construction industry in Hungary was affected by economic recession and poor investor confidence resulting in weak activity in 2012. The market, however, improved and grew at a CAGR of 3.55% from 2011 to 2015.