Construction order books reach critically low levels
According to ÉVOSZ, many construction companies, design and engineering firms will not get enough work for the rest of the year, even with increasing competition, to stay in business for the next two years without redundancies. Most construction companies will need to radically cut costs, which may involve redundancies. The sector wants to retain skilled workers and engineers at all costs, and needs jobs to do so.
The well-known reduction in public orders (around HUF 3,000 billion), a 25% decline in housing construction and renovation, and the use of imported materials, non-EU labour, and contractor capacity by foreign investors have combined to put the players in the domestic construction value chain in a critical situation, warns László Koji, president of ÉVOSZ.
There has not been such a high level of cyclicality in construction investment in the last ten years.
ÉVOSZ calls for a steady spending of state and municipal funds for construction and investment. There is a need for continued preparation of government construction and investment procurement, acceleration of preparations, further calls for tenders and the commissioning of project implementation. The government's role in balancing the demand in the construction market should be firmly asserted. The adoption of the Public Construction Investment Framework Law as soon as possible is necessary to move forward in defining the ten-year public investment programme. Knowing the demand of the largest customer would make the market players' options more predictable.
At the moment, there is no sign of investment in Hungary from the EU's economic development programmes to boost the European Economic Area. The Association calls for the development and interconnection of energy networks, the development of long-distance transport systems, the construction and investment tasks necessary for the development and interconnection of regional water management and production systems.
The industry is looking for progress on a number of issues. ÉVOSZ lists these as:
- Paks 2 to be substantially launched and implemented,
- the national housing renovation programme,
- the rental housing programme,
- the programme for the reconstruction of drinking water and sewerage systems,
- the urban infrastructure development programme for metropolitan transport,
- the 160 km/h railways programme,
- the reconstruction of wastewater treatment systems,
- further development of intermodal logistics centres,
- the development of agricultural irrigation networks and water management systems,
- and the development of environmentally friendly energy production and storage capacities.
Housing construction and renovation will continue to shrink without public incentives and bank financing acceptable to the population.
Based on their experience from their contacts with the public, builders indicate that home builders are waiting for an update of the family home building allowance (CSOK), as well as renovation subsidies that will lead to energy savings.
ÉVOSZ points out that domestic product manufacturers, designers and contractors are getting less and less chance to participate in the projects of investors from outside the European Union. Non-EU products, labour and construction capacities appear without competition in the holdings of investors benefiting from the Hungarian state. In addition, there is a lack of monitoring of compliance with EU and Hungarian legislation, which needs to change. Contractors must do everything possible to improve efficiency. Of these, adult education and training are of particular importance. Training programmes initiated and run by employers have a retaining effect on the workforce.
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