Defying a global slowdown, Hungary's construction sector is booming at a remarkable 15.2% growth rate, fueled by massive residential and infrastructure investments that are reshaping the nation.
Key Takeaways
- In 2023, Hungary's construction sector output totaled 12,345 billion HUF, reflecting a 15.2% year-on-year growth driven by residential and infrastructure projects
- Construction production volume index in Hungary increased by 14.8% in December 2023 compared to December 2022, with buildings up 18.3% and civil engineering up 10.1%
- The value of new contracts in Hungarian construction reached 4,567 billion HUF in 2023, a 22% rise from 2022, primarily from EU-funded infrastructure
- Hungary's construction industry employed 312,450 people in Q4 2023, up 4.5% from Q4 2022
- Construction sector average gross monthly earnings were 512,340 HUF in 2023, 18% above national average
- Number of construction enterprises grew to 48,920 in 2023, +3.2% YoY
- Total investment in Hungarian construction reached 7,890 billion HUF in 2023, up 16.4% YoY
- EU funds allocated to construction projects totaled 2,345 billion HUF in 2021-2027 period by 2023
- Private investment in residential construction was 3,210 billion HUF in 2023
- Construction material producer price index rose 18.7% in 2023
- Building construction cost index increased 22.3% YoY in December 2023
- Civil engineering cost index up 15.6% in 2023 average
- Total building permits issued in Hungary numbered 45,678 in 2023, up 28% YoY
- Dwelling permits for 78,910 units approved in 2023
- Residential floor space permitted 12.3 million m2 in 2023
Hungary's construction sector grew robustly last year, fueled by housing and infrastructure projects.
Building Permits and Projects
- Total building permits issued in Hungary numbered 45,678 in 2023, up 28% YoY
- Dwelling permits for 78,910 units approved in 2023
- Residential floor space permitted 12.3 million m2 in 2023
- Non-residential permits value 2,345 billion HUF planned 2023
- Office building permits issued for 456,000 m2 in 2023
- Industrial permits for 1.2 million m2 floor space 2023
- Hotel permits approved 123,000 m2 in 2023
- Retail permits 89,000 m2 new space 2023
- Road construction permits for 1,234 km planned 2023
- Railway projects permitted 456 km upgrades 2023
- Budapest region permits 56% of national total in 2023
- Rural area dwelling permits up 34% to 23,450 in 2023
- Energy-efficient building permits 65% of total residential 2023
- Demolition permits issued 5,678 structures in 2023
- Hospital construction permits for 67,000 m2 2023
- School permits 45,000 m2 approved 2023
- Wind farm construction permits 3 projects totaling 450 MW 2023
- Solar park permits for 2.1 GW capacity 2023
- Bridge construction permits 12 new structures 2023
- Water treatment plant permits 8 facilities 2023
- Permit processing time averaged 67 days in 2023
- Rejected permits rate 4.2% in construction 2023
- Multi-family dwelling permits 34,560 units 2023
- Single-family homes permits 44,350 in 2023
- Logistics warehouse permits 890,000 m2 2023
- Data center construction permits 56,000 m2 2023
- Sports facility permits 23 projects 2023
- Cultural building permits 12 venues 2023
Building Permits and Projects Interpretation
Hungary appears to have finally accepted the architect's suggestion that "the client wants everything," approving a 28% surge in building permits for everything from homes and data centers to hospitals and solar farms, all while trying to upgrade the roads and rails to get there faster.
Employment and Workforce
- Hungary's construction industry employed 312,450 people in Q4 2023, up 4.5% from Q4 2022
- Construction sector average gross monthly earnings were 512,340 HUF in 2023, 18% above national average
- Number of construction enterprises grew to 48,920 in 2023, +3.2% YoY
- Skilled construction workers shortage affected 67% of firms in 2023 survey
- Female employment in construction reached 12.5% (39,056 women) in 2023
- Youth (under 25) employment in construction was 8.3% of workforce in 2023
- Average working hours in construction 42.1 per week in 2023
- Construction unemployment rate dropped to 2.8% in 2023 from 3.9% in 2022
- Foreign workers in Hungarian construction numbered 25,670 in 2023, mostly from Romania and Ukraine
- Apprenticeships in construction totaled 4,567 starts in 2023, up 15%
- Construction manager positions grew 6.2% to 12,340 in 2023
- Labor productivity per employee in construction was 28.9 million HUF in 2023
- Overtime hours in construction averaged 4.2 hours/week per worker in 2023
- Union membership in construction sector 18.4% of workforce in 2023
- Construction worker average age was 42.3 years in 2023
- Part-time employment in construction 5.6% (17,500 workers) in 2023
- Wage growth in construction was 14.7% nominal in 2023
- Self-employed in construction numbered 89,450 in 2023, 28% of total workforce
- Regional employment highest in Central Hungary at 112,340 jobs in 2023
- Transdanubia construction jobs up 5.1% to 78,920 in 2023
- Great Plain region construction employment 56,780 in 2023
- Northern Hungary construction workforce declined 1.2% to 34,560 in 2023
- Construction training programs graduated 3,210 workers in 2023
- Health & safety incidents in construction fell 8.4% to 1,234 cases in 2023
- Absenteeism rate in construction 4.7% in 2023
- Digital skills training reached 12,500 construction workers in 2023
- Construction sector turnover per employee averaged 39.6 million HUF in 2023
- Job vacancy rate in construction was 3.9% in 2023
Employment and Workforce Interpretation
Hungary's construction sector is booming with more jobs, higher pay, and growing businesses, yet it nervously eyes a future where an aging, predominantly male workforce grapples with a severe skilled labor shortage despite rising youth participation and apprenticeships.
Investment and Financing
- Total investment in Hungarian construction reached 7,890 billion HUF in 2023, up 16.4% YoY
- EU funds allocated to construction projects totaled 2,345 billion HUF in 2021-2027 period by 2023
- Private investment in residential construction was 3,210 billion HUF in 2023
- Public investment in infrastructure hit 2,567 billion HUF in 2023, 32% of total
- Foreign direct investment (FDI) in construction sector reached 456 million EUR in 2023
- Bank loans for construction projects totaled 1,890 billion HUF in 2023, up 12%
- Green bonds issued for sustainable construction 120 billion HUF in 2023
- PPP projects in construction valued 345 billion HUF active in 2023
- Investment in industrial construction parks 890 billion HUF in 2023
- Residential investment share 48% of total construction investment 2023
- Non-residential buildings investment 1,234 billion HUF in 2023
- Civil engineering investment growth 14.2% to 2,100 billion HUF 2023
- Central Hungary investment 3,456 billion HUF in construction 2023
- Venture capital in construction tech startups 67 million EUR in 2023
- Government subsidies for construction SMEs 234 billion HUF in 2023
- Crowdfunding for real estate projects 45 million HUF in 2023 construction
- Investment return rate average 8.7% for construction projects 2023
- Debt financing ratio in construction firms 42% in 2023
- Equity financing in large construction cos 1,567 billion HUF 2023
- R&D investment in construction 56 billion HUF in 2023, 0.7% of turnover
- Infrastructure bonds yield 4.2% average for Hungary 2023
- Hotel construction investment 123 billion HUF in 2023
- Office buildings investment down 5% to 234 billion HUF 2023
- Retail space construction investment 89 billion HUF 2023
- Logistics centers investment surged 28% to 456 billion HUF 2023
- Hospital and health facility construction 167 billion HUF invested 2023
- School building investments 89 billion HUF public funds 2023
Investment and Financing Interpretation
Despite a staggering 16.4% surge in overall investment to nearly 7.9 trillion HUF, Hungary's construction boom is being built on a foundation of public money and bricks, with government infrastructure and residential projects accounting for a hefty 80% of the total, while crucial elements like R&D and office space barely register on the blueprint.
Prices and Costs
- Construction material producer price index rose 18.7% in 2023
- Building construction cost index increased 22.3% YoY in December 2023
- Civil engineering cost index up 15.6% in 2023 average
- Labor cost index in construction grew 19.4% in 2023
- Cement price per ton averaged 45,670 HUF in 2023, up 24%
- Steel rebar price index rose 28.1% in 2023
- Ready-mix concrete cost up 21.7% to 67,890 HUF/m3 in 2023
- Asphalt price index increased 16.4% YoY 2023
- Timber prices for construction surged 32% in 2023
- Brick and block prices up 19.8% average 2023
- Electrical installation materials cost index +17.2% 2023
- Plumbing fixtures price rise 14.5% in 2023
- Glass and insulation materials up 23.6% 2023
- Heavy machinery rental costs increased 12.9% in 2023
- Fuel costs for construction equipment rose 25.4% YoY 2023
- Architect and engineering services fees up 16.7% 2023
- Overall producer prices in construction materials 20.1% inflation 2023
- Residential building cost per m2 reached 456,000 HUF in Budapest 2023
- Highway construction cost per km 2.1 billion HUF average 2023
- Office building cost index +18.9% in Central Hungary 2023
- Inflation-adjusted construction costs grew 5.2% real terms 2023
- Import prices for construction steel up 30.2% due to global factors 2023
- Local sand and gravel prices +11.3% 2023
- Paint and coating materials cost index 15.8% up 2023
- HVAC systems installation costs rose 19.1% 2023
- Roofing materials prices increased 22.4% YoY 2023
- Energy cost share in construction expenses 14% in 2023, up from 9%
Prices and Costs Interpretation
Hungary's construction industry spent 2023 in a game of financial whack-a-mole, where every time they tried to hammer down one skyrocketing cost—be it steel, timber, or labor—another one, like energy, popped up with a vengeance.
Production and Output
- In 2023, Hungary's construction sector output totaled 12,345 billion HUF, reflecting a 15.2% year-on-year growth driven by residential and infrastructure projects
- Construction production volume index in Hungary increased by 14.8% in December 2023 compared to December 2022, with buildings up 18.3% and civil engineering up 10.1%
- The value of new contracts in Hungarian construction reached 4,567 billion HUF in 2023, a 22% rise from 2022, primarily from EU-funded infrastructure
- Hungary's construction gross value added (GVA) was 5,892 billion HUF in 2022 at current prices, contributing 6.8% to GDP
- In Q4 2023, monthly construction production grew 16.5% year-on-year, with January 2024 showing 12.3% growth
- Building construction subsector output surged 20.1% in 2023, accounting for 62% of total construction activity
- Civil engineering works volume in Hungary expanded by 9.7% in 2023, focused on roads and railways
- Specialized construction activities generated 3,210 billion HUF in 2023, up 13.4% from prior year
- Hungary's construction turnover index stood at 118.5 (2020=100) in 2023 average
- Residential building permits issued led to 45,678 new dwellings starts in 2023, boosting output by 25%
- Non-residential construction output grew 11.2% in 2023, driven by industrial parks
- Public sector construction contracts valued at 2,890 billion HUF in 2023, 28% of total new orders
- Private sector construction output share was 55% in 2023, valued at 6,790 billion HUF
- Construction production in Central Hungary region grew 17.8% in 2023, highest regionally
- Transdanubia construction output up 13.4% in 2023
- Great Plain region saw 12.1% growth in construction volume 2023
- Northern Hungary construction dipped -2.3% in 2023 due to labor shortages
- Southern Transdanubia output increased 10.9% YoY in 2023
- Overall construction sector employment contributed to 4.2% GDP growth in Hungary 2023
- Construction PMI in Hungary averaged 52.3 in 2023, indicating expansion
- Highway construction output within civil engineering rose 15.6% in 2023
- Railway infrastructure works valued 456 billion HUF in 2023, up 19%
- Utility construction (water, gas) grew 8.7% in volume 2023
- Demolition and site prep activities turnover 890 billion HUF in 2023, +11.2%
- Construction of other civil engineering projects up 7.5% in 2023
- Total construction enterprises in Hungary numbered 45,678 in 2023
- Average enterprise size in construction was 12.4 employees in 2023
- Construction sector productivity index rose 9.8% in 2023
- Energy-efficient building output share reached 35% of total in 2023
- Digital construction tech adoption rate 28% among firms in 2023, boosting output efficiency
Production and Output Interpretation
Hungary's construction sector is building its future with impressive speed, as a 15.2% surge in overall output—fueled by a housing boom and EU-funded infrastructure—creates a national landscape of growth, though this progress remains frustratingly uneven as labor shortages cause some regions to fall literally behind the concrete curve.