Published on: 31 August 2020

Investments decreased by 9.9 % in the 2nd quarter of 2020

In the second quarter of 2020 the national economy’s investments further decreased, the volume of developments lagged 9.9% behind, compared to the same period of the previous year. Most sections of the national economy contributed to this trend. The investments of the budgetary units declined in a larger degree than the developments of the enterprises. In the case of the former mostly the shrinking performance value of the EU projects, at the latter mainly the unfavourably changing economic environment caused the reduced activity.

In the 2nd quarter of 2020, seasonally adjusted:

The seasonally adjusted volume of investments decreased by 3.3% compared to the previous quarter, continuing the trend that started in the 3rd quarter of 2019. Within it the seasonally adjusted volume of construction investments decreased by 2.9 %, while investments in machinery and equipment decreased in a larger degree, by 4.3%.

In the 2nd quarter of 2020 compared to the same period of the previous year:

The volume of investment activity decreased by 9.9%. Within it construction investments representing close to six-tenth of the total volume of investments decreased by 9.2%, investments in machinery and equipment representing four-tenth of the total value of investments decreased in a larger degree, by 11%. This represents the most unfavourable change of all three indicators in the last three years.

The volume of investments in the case of enterprises employing at least 50 people and realising 57% of investment performance – after more than three years of continuous growth – decreased by 12%. Foreign enterprises’ reduced development activity due to the unfavourable economic environment caused by the epidemic played an outstanding role. At the same time in the case of budgetary units, realising 13% of investments, developments were down by an even higher rate, by 19% compared to the base period. This was partially due to the fact that a smaller volume of EU-financed projects have been realised than a year earlier.

Developments in the largest weight representing manufacturing – being responsible for more than one quarter of investments – significantly fell (by10%). Developments decreased widely in all of the subsections, except three, investments decreased in an outstanding degree in the great weight representing manufacture of transport equipment, in the manufacture of basic metals and manufacture of fabricated metal products except machinery and equipment and in the manufacture of machinery and equipment n.e.c.. Due to long-lasting, ongoing, high value projects investment volume increased outstandingly in the fields of manufacture of electrical equipment, manufacture of basic pharmaceutical products and pharmaceutical preparations, and in the manufacture of food products.

The investment performance of real estate activities realising close to one-fifth of total investments, fell by 2.0%, within it dwelling constructions significantly grew, at the same time developments oriented toward business facilities for rent (e.g. office buildings) shrunk.

The decrease in the third larger field, transportation and storage continued (by 9.6%), caused mainly by the reduction of infrastructural developments. Moreover investments of enterprises engaged in transportation also fell behind compared to the base period.

Certain fields of the general government contributed to the performance decrease of the national economy’s investments . The volume plummeted by 29% in the case of the fourth largest investor, public administration and defence; compulsory social security, - mainly as a result of the more moderate acquisitions conducted by central governmental bodies. In the eighth largest field, that of arts, entertainment and recreation – due to the lower expenditure of the ongoing sport and culture related projects – investments decreased by 28%. In the case of water supply and waste management investments decreased at a higher rate (by 14%) than the national economy’s average as well.

Investments in the fifth largest field, agriculture, forestry and fishing increased moderately (by 1.8%), where mainly smaller businesses increased their machinery acquisitions.

In the field of wholesale and retail trade, and repair of motor vehicles and motorcycles carrying the sixth largest weight, investments significantly decreased (by 13%). Growing developments in retail trade did not counterbalance the decline in the wholesale trade as well as in the retail trade and repair of motor vehicles and motorcycles.

Developments grew significantly in several smaller weight representing sections. In relation with the pandemic situation, due the high volume of developments in the field of in-patient care, investments in human health and social work activities grew by 32%. Investments grew significantly in the field of the energy industry (14%) among others due to electricity network renewals. Investments also grew in the field of information and communication (6.5%) where network developments played a role, too.

At the same time investment decreases were larger in several relatively small weight representing sections than the national economy’s average. The greatest decrease was recorded in the field of mining and quarrying (55%), in correlation with the fall in the international price of energy carriers. Among business units in construction investment performance fell by 36%, in the field of accommodation and food service activities – mainly as a result of the low-key developments of smaller accommodations – it decreased by 35%.

Performance value and volume change of national investments

Section 2nd quarter of 2020 First half of 2020
at current prices,million HUF volume index, corresponding period of previous year=100.0% at current prices,million HUF volume index, corresponding period of previous year=100.0%
Total2 298 350 90.1 4 094 784 93.7
Of which*:
manufacturing587 25089.61 144 94997.7
real estate activities 406 79198.0738 081102.1
transportation and storage 367 05990.4593 71492.8
public administration and defence; compulsory social security124 36271.4190 35371.0
agriculture, forestry and fishing121 999101.8235 280113.7
wholesale and retail trade, repair of motor vehicles and motorcycles110 37087.5213 29594.4

*Data of the six largest weight carrying sections, based on investment performance of the given quarter