However, the change is so small that we can speak of stagnation rather than an emerging positive trend.
The Construction Industry Confidence Index rose to 3.6 stars this year from 3.35 stars last year. Although this is a measurable improvement, it is still only an average result. At the same time, the average level of damages also shows a small decrease: in August 2024, the average amount of damages was HUF 814,791, which is HUF 5,445 less than a year earlier.
“The slowdown in the construction industry brought significant changes to the market. The workload of the specialists decreased, thereby alleviating the shortage of specialists, which allowed the customers to choose contractors and materials more carefully. In addition, the clients have become more aware, more and more people are asking for references, and they are more thoroughly informed about the past work of specialists before they give an order. Together, these factors led to improved data”
– explains Béla Markovich, managing director of Mapei Kft.
“Mountains of damage” in Southern Transdanubia, relief in the Southern Great Plain
Based on the results of the research, the damage caused by counter works is still a significant problem. Although the damage amounts have decreased, they still place a heavy financial burden on those involved. The highest average damage amount was measured in Southern Transdanubia, HUF 1,624,630, which means an increase of HUF 772,660 compared to the previous year. There is also an increase in Northern Hungary, where the amount of damage increased by HUF 443,356, which amounts to HUF 856,376.
The average amount of damage for counter works by region, August 2024 (changes compared to August 2023 data can be seen below the amount of damage). Note: In 2024, due to the lower number of elements, extreme individual damages of HUF 10 million or more significantly affected the average of the regions.
On the other hand, the lowest average amount of damage was registered in the Southern Great Plain, where the average damage decreased to HUF 547,969, which is 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 can distort the county averages, which justifies the large changes.
Most of the work in Budapest is counter work
The national average of counter work is 23 percent, which is the same as a year earlier, but significant differences can be observed between regions. The highest rate was measured in Budapest, where 35 percent of the respondents reported working at counters, and in the county of Pest, this rate was 30 percent.
Proportion of counter and weak jobs by region, August 2024
The research also measured a high incidence of 32 percent in the Northern Great Plain. On the other hand, the lowest counterwork rate was in Central Transdanubia, where only 17 percent experienced this type of problem, and in Western Transdanubia, 19 percent were measured. The proportion of affected respondents was 21 percent in Southern Transdanubia, and 20 percent in the Southern Great Plain.
“The central economic and social role of the country, which is concentrated in Budapest, is also reflected in the construction industry. The capital attracts the most construction and renovations, which results in a higher demand for professionals. However, this increases the risk of the appearance of less reliable contractors who cannot guarantee adequate quality. Due to the lack of professionals and the periodic workload of high-volume work, counterwork is more common in Budapest. The country’s focus on the capital is also reflected in these statistics”
Béla Markovich explains.
Where does trust weaken and where does it strengthen?
The summer 2024 results of the MAPEI Construction Trust Index (ÉBI) show a diverse picture of trust in construction professionals in different regions of the country. The highest values were registered in the counties of Veszprém (4.16), Heves (4.06) and Zala (4.02), where the population continues to assess the work of construction professionals favorably. In contrast, trust in the construction industry is at a lower level in the counties of Hajdú-Bihar (3.11) and Jász-Nagykun-Szolnok (3.19).
Construction Confidence Index (ÉBI) by county, August 2024
A significant improvement can be observed in some regions: in Zala, the trust index increased from 3.31 to 4.02, and in Veszprém it changed from 3.53 to 4.16. On the other hand, it decreased in Hajdú-Bihar (from 3.45 to 3.11).
The Home Improvement Program can also reduce counter work
According to the research, the social perception of the Home Renovation Program is favorable despite the difficulties. 75 percent of the respondents consider the program useful, primarily because of the reduction in energy costs, the increase in the value of real estate, and the environmental benefits. Many highlight the investment-stimulating effect of the program.
The proportion of those criticizing the program is only 4 percent, who mainly mention the complicated eligibility conditions and administrative difficulties as negatives. In addition, in some cases, the price-inflating effect of state subsidies is also raised as a problem.
“Another indirect positive effect of the Home Renovation Program is that it contributes to the reduction of counter work. The strict application requirements, the more favorable accountability of the use of registered contractors, the registration of key products, the mandatory energy certificate and the prescribed energy savings all significantly reduce the risk of counter-damages. Thanks to this, the program can contribute not only to the reduction of energy costs and the increase in the value of real estate, but also to the improvement of confidence in the construction industry”
– said Béla Markovich, managing director of Mapei Kft.
Cautious optimism, slowly building trust
Based on the data, the improvement in confidence in the construction industry is moderate, which is also reflected by the fact that 41 percent of the respondents think things are going in the wrong direction, while last year this proportion was 49 percent. This 8 percentage point drop indicates a positive shift, but optimism is not yet universal.
Only 25 percent of respondents believe that things are moving in the right direction, suggesting that confidence is gradually building, but the majority of the public is still uncertain or critical about the current state of the construction industry.
Source: www.technokrata.hu
