According to data from the Central Statistical Office, construction output volume in March 2025 decreased by 3.4% compared to the same month in the previous year.

Both major subcategories of construction production posted declines, with construction of buildings decreasing by 0.1% and other constructions falling by 8.9%.

Production volume for building construction expanded by 27.8%, while other construction activities saw a growth of 1.8%.

However, the largest segment, specialized construction activities, experienced a substantial decrease of 20.1%.

The volume of newly contracted projects in the construction sector was 27.3% lower than that of the previous year.

Notably, contracts for building construction plummeted by 41.3%, while agreements for other constructions rose by 10.4%.

At the end of March, the contract stock for construction companies was 3.8% above the level of the previous year, yet contracts for building construction were down by 14.7%, contrasted with a 20.7% increase in contracts for other constructions compared to March 2024.

On a monthly basis, seasonally adjusted indices showed that construction production in March was 0.7% higher than in February.

However, when viewed quarterly, construction output declined by 5.7% in the first three months of 2025 compared to the same period in 2024.

Producer prices in the construction sector rose in the first quarter of 2025, with increases of 6.0% in other construction activities and specialized construction, and a 4.1% rise in building construction compared to the first quarter of 2024. Overall, producer prices in the construction industry were 2.2% higher than those recorded in the fourth quarter of 2024.

Industry experts have noted a marked sense of uncertainty among the public regarding construction activities.

Although there are signs of life in the residential construction, expansion, and renovation segments, spurred by the revival of the used housing market and renewed government support, apprehensions within the construction material trade suggest potential challenges ahead.

In the first quarter of 2025, the number of building permits issued increased by 25% compared to the same quarter in 2024, with this growth predominantly concentrated in Budapest, raising concerns about whether provincial cities and smaller towns will align with this trend.

Trade data from Újház Zrt.

indicate that, following a strong start to the year, growth in construction material sales is slowing.

While initial months saw double-digit growth in structural materials and masonry production, signs suggest that sustaining this growth will be difficult moving forward.

Forecasts for the sector remain mixed.

March saw an annual decline in construction activity, even as a monthly increase was recorded.

Similarly, the first quarter demonstrated a 5.7% reduction year-on-year, although seasonally adjusted data indicated a 1.4% increase on a quarterly basis.

Adverse weather conditions in March, while milder than the previous year, hindered some construction processes.

Experts emphasize that the volume of building construction stabilized compared to the previous year, potentially aided by an increase in working days this year.

However, the 1.1% monthly rise in production volume may reflect a correction from the previous February’s 5.2% decline.

The building construction sector is closely tied to corporate investments, which are currently influenced by ongoing uncertainties pertaining to economic outlooks.

Moreover, the other category of construction experienced a more pronounced decline, with an 8.9% drop year-on-year, alongside similar reductions in monthly output.

The contract stock indicates better prospects in this segment, with March figures reflecting a 20.7% increase, possibly driven by government contracts.

Producer prices in the construction sector continued their upward trend in the first quarter, rising by 5.4% year-on-year and by 2.2% compared to the previous quarter, despite the sector’s performance remaining below the levels observed in 2021.

The President of the Construction Entrepreneurs National Association remarked that construction capacities are prepared for recovery, although considerable time may still be required for a significant upswing.

The government anticipates economic growth this year; however, forecasts suggest that 2025 may not be favorable for the construction sector in the first half.

Notably, a significant amount of state investment has been frozen, affecting not only implementation but also the preparation and planning phases, which could delay projects by approximately six months.

Thus, even if the release of funds begins in January, actual construction work may only commence in the latter half of the year.

Experts advise a longer-term view for assessing trends in the construction economy, suggesting that significant insights may be drawn from examining semi-annual data.