Contraction costs in the construction sector down by a hair

As it does every year, this year too, Mapei Kft. has prepared the national Construction Industry Confidence Index (ÉBI) survey, which revealed that the Construction Industry Confidence Index rose to 3.6 stars this year from 3.35 stars last year. They emphasised that although this is a measurable improvement, it is still only an average result.

In parallel, the average amount of damage caused by the damage also shows a slight decrease: in August 2024, the average amount of damage was HUF 814 791, which is HUF 5 445 less than the amount of damage caused a year earlier.

"The slowdown in construction has brought significant changes to the market. The workload of professionals has decreased, alleviating the shortage of skilled workers and allowing clients to choose contractors and materials more carefully. In addition, clients have become more aware, asking for references and becoming more informed about the past work of professionals before placing an order. All these factors have combined to improve the figures," explains Bela Markovich, Mapei Kft. CEO of Mapei Kft..

"Damage hills" in Southern Transdanubia, easing in Southern Great Plain

The results of the research show that damage from container works remains a significant problem. Although the amount of damage has decreased, it still represents a heavy financial burden for those affected. In South Transdanubia, the highest average damage amount was measured at 1 624 630 HUF, an increase of 772 660 HUF compared to the previous year. Northern Hungary also saw an increase, with an increase of HUF 443 356 to HUF 856 376.

Average damage totals for container works by region, August 2024 (changes below the damage totals compared to August 2023 are shown). Note: In 2024, due to the lower number of items, extreme case damage totals of 10 million HUF or more significantly affected the average for each region.

On the other hand, the lowest average damage was recorded in the Southern Great Plain, where the average damage fell to HUF 547 969, a decrease of HUF 669 120 compared to the previous year. It is important to note that higher damage amounts of HUF 10 million and above may distort the county averages, which justifies the large changes.

Budapest has the most container work

The national average for contingent work is 23 percent, the same as a year earlier, but there are significant differences between regions. The highest rate was measured in Budapest, where 35 percent of respondents reported contingent work, and in Pest county the rate was 30 percent.

Accounting and weak works rates by region, August 2024

The survey also found a high prevalence of 32 percent in the Northern Great Plain. In contrast, the lowest rate of contingent work was found in Central Transdanubia, where only 17 percent experienced this type of problem, and 19 percent in Western Transdanubia. In Southern Transdanubia, the proportion of respondents affected was 21%, while in Southern Great Plain it was 20%.

"The country's economic and social centrality in Budapest is also reflected in the construction industry. The capital city attracts the most construction and renovation work, resulting in higher demand for skilled workers.

However, this increases the risk that less reliable contractors will appear who cannot guarantee the right quality. Due to the shortage of skilled workers and the periodic workload of large-scale works, contracting is more frequent in Budapest. The capital-centricity of the country is also reflected in these statistics."

- explains Béla Markovich.

Where does trust weaken and where does it grow?

The MAPEI Construction Industry Confidence Index (CBI) Summer 2024 results show a varied picture of confidence in construction professionals in different regions of the country.

The highest scores were registered in the counties of Veszprém (4.16), Heves (4.06) and Zala (4.02), where the population continues to have a positive opinion of the work of construction professionals.

In contrast, confidence in the construction sector is lower in Hajdú-Bihar (3.11) and Jász-Nagykun-Szolnok (3.19) counties.

Construction Trust Index (NBI) by county, August 2024

The Home Renovation Programme can also reduce container work

The research shows that the public perception of the Home Renovation Programme is positive, despite the difficulties. 75% of respondents consider the programme to be useful, mainly because of the reduction in energy costs, the increase in property values and the environmental benefits. Many highlight the incentive effect of the programme on investment.

Only 4% of those who criticise the programme cite the complex eligibility criteria and administrative difficulties as the main negative points. In some cases, the upward effect of state subsidies is also cited as a problem.

"Another indirect positive effect of the Home Renovation Programme is that it contributes to reducing the use of contractors. Strict tendering requirements, more favourable accountability for the use of registered contractors, registration of key products, mandatory energy certification and mandatory energy savings all significantly reduce the risk of damage from contractors. As a result, the scheme can contribute not only to reducing energy costs and increasing property values, but also to improving confidence in the construction industry"

- said Béla Markovich, CEO of Mapei Kft.."

Cautious optimism, confidence slowly building

The data shows that the improvement in confidence in the construction sector is modest, as reflected by the fact that 41% of respondents think things are going wrong, compared to 49% last year. This drop of 8 percentage points indicates a positive shift, but optimism is not yet widespread.

Only 25 percent of respondents think things are going in the right direction, suggesting that confidence is gradually building, but the majority of the population is still uncertain or critical about the current situation in the construction industry.

Source : Link