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Construction sector output slows to a crawl

Output of Hungary's construction sector rose by an annual 3.2 percent in April, slowing from double-digit growth in the previous couple of months, the Central Statistical Office (KSH) said on Wednesday.

Output of the buildings segment edged down 1.2 percent, while civil engineering output increased by 11.4 percent.

In absolute terms, construction sector output was worth 426.8 billion forints in April. The buildings segment accounted for 58 percent of the total.

Month on month, construction sector output dropped by 5.9 percent, adjusted for seasonal and working-day effects.

Noting the slowdown and signs of supply problems, Magyar Bankholding analyst Andras Hovath nevertheless warned against reading into 1-2 months of data from such a volatile branch of the economy. Full-year growth, he added, was likely to arrive at more than 10 percent, supported by home construction and renovation and a backlog of state orders. Contract values are at record highs, Hovath said, though the revaluation of existing contracts may have a large part to play in this. In the spring, contractors expected a rise in costs of 10 percent, and now 25 percent-plus is likely, he added.

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