Hungary Investments Q1 2008

According to preliminary data from the national statistics office investments in the Hungarian economy were down by 4.8% year on year in the first quarter of 2008. The volume of investment – according to seasonally adjusted indices – was 1% lower than in the previous quarter.

Construction investments fell by 15.5%, while investments in machines and equipment were up by 8.4%.

The decrease of investments – and in particular the fall in construction investments – has largely been caused by a decline of 16.8% under the transport, storage and communication heading, since these investments consist mainly of highway and road construction.

This pace of the decrease is partly produced by the very high base for first quarter investments in 2007.

Investments in manufacturing industry were down by 9.8%. Within manufacturing substantial decreases occured in the manufacture of rubber and plastic products and the decrease was also significant in the manufacture of electrical and optical equipment, both of these are areas which saw substantial investment last year.

Investment in the manufacture of transport equipment was largely unchanged.

Investment also fell in education (27.9%), public administration and defence; compulsory social security (24.5%) and in other community, social and personal service activities (19.4%). The volume of investment in real estate, renting and business activities grew by 8%. This section also includes housing construction.

Hotels and restaurants were up due to renovation and extension of hotel buildings, while a rise of 43.7% took place in agriculture, due largely to significant machine and equipment investments and to the low base of the previous year. The section wholesale, retail and repair trades was up 19.5% largely on investments by big chain stores.