The volume of investments in Hungary contracted 9.3% year on year in the third quarter of 2016, the Central Statistical Office (KSH) reported on Monday. This decrease should not be considered as dramatic, though, given that investments grew by 2.7% over the previous quarter. Therefore it seems the plummet in early 2016 also meant reaching rock bottom. Not that there were no room for improvement.
Investments took a plunge in early 2016, as due to the ebbing of EU funds most state development projects were put on hold and the business sector fared poorly, as well. By the middle of the year it seemed the shock is over and the investment trend will take a turn upwardly.
It is definitely great news that today’s detailed figures showed a 15% yr/yr growth in developments in manufacturing, realizing one third of investments in the national economy. “Development mood - beyond some outstanding large investments - rose in the case of the majority of industrial enterprises as well," the stats office commented.
“In the majority of sub-sections, investment activity - similarly to the previous quarter - grew notably again, mainly in the manufacture of basic metals and fabricated metal products, except machinery and equipment, moreover, in other manufacturing and repair and installation of machinery and equipment. Additionally, investments grew prominently in the manufacture of rubber, plastics and non-metallic mineral products as well as of food products, beverages and tobacco products," the KSH added.
Of course, the most characteristic phenomenon in the annual index remains the decrease in investments that hinge on EU funds. As a consequence, large contraction was recorded in state investments (e.g. public administration, utilities), and sectors depending on state orders (e.g. transportation), whereas the overall picture is much brighter in other areas.
In more than the half of sections a rise was registered in investment activity, being the most significant (46%) in financial and insurance activities, where the purchase of new computing devices also enhanced the performance of investments. After a decrease lasting for over a year the performance of investments in agriculture, forestry and fishing was up by 35%, which was influenced by the purchase of machinery and transport equipment as well as large investments in plantations. An outstanding rise was recorded in investments in accommodation and food service activities (34%) as well, along with a longer duration of increases in tourism nights and gross revenues of accommodation establishments.
At the same time, investment activity decreased in nine sections, the most significantly (by 79%) - similarly to the previous quarters - in water supply, sewerage and waste management, the reason for which was the completion of projects for drinking water improvement, waste water treatment and waste management, financed from EU funds.
The volume of investments in transportation and storage - primarily due to the lower investment performances of road construction and road rehabilitation projects, financed from EU funds - fell by 31%. With the completion at the end of 2015 of developments financed from EU funds, investments decreased to a high extent in human health and social work activities (73%), in public administration and defence and compulsory social security (41%) as well as in education (23%).
Charting is displayed using TradingView's technology, a platform, where you can build advanced charts,
spot upcoming trends in the stock screener, and find inspiration in multiple trading ideas
