Published on: 31 May 2021

Investments increased by 2.5% in the 1st quarter of 2021

In the first quarter of 2021, the growth started in the previous quarter continued, with the volume of developments up by 2.5% year-on-year and - seasonally adjusted - by 0.5% compared to the previous quarter. As in the previous quarter, the recovery was again driven by rising activity in general government and households, while business development continued to fall. Manufacturing and infrastructure developments, having a dominant weight, held back, while real estate and commercial investment boosted the economy's performance.

In the 1st quarter of 2021, seasonally adjusted:

The seasonally adjusted volume of investment in the national economy rose by 0.5% compared with the previous quarter. Within this, seasonally adjusted investment in construction fell by 0.9% and investment in machinery and equipment grew by 1.5%. The seasonally adjusted volume of investment in the national economy also exceeded the level of the fourth quarter of 2019, before the outbreak of the Covid19 pandemic.

In the 1st quarter of 2021, compared to the same period of the previous year:

The volume of investment activity increased by 2.5%. Within this, construction, which represents 53% of total volume, fell by 1.0%, while investment in machinery and equipment, which accounts for 46%, rose by 7.0%. Around seven-tenths of investment in machinery and equipment in the period came from imports.

Among enterprises employing at least 50 people, which account for 53% of investment performance, the volume of development fell by 6.3%, broadly in line with the average pace of previous quarters, with a marked decline in the development of foreign-owned enterprises. At the same time, development in budgetary units, which accounted for 13% of investment, rose by 31%. While local governments saw their development fall, purchases of fixed assets by central government institutions nearly doubled.

Investment expanded in most sections of the national economy over the period. The performance of real estate activities, which is the second largest investor and accounts for one fifth of developments in the national economy, was the main contributor (2.2 percentage points) to the volume growth of investment in the national economy in the first quarter. The area's investment performance increased significantly by 12%, mainly due to strong growth in the dominant residential construction sector.

The 16% increase in the volume of investment in wholesale and retail trade and repair of motor vehicles and motorcycles also contributed significantly (0.9 percentage points) to the change in the volume of investment in the national economy. Here, there was a significant increase in the development of retail stores in the current period.

The public administration and defence section significantly increased its investment volume (by 1.2 percentage points), as the area's development increased by nearly a third, with investment in flood protection playing a key role.

At the same time, several sections of the national economy significantly moderated investment volume growth. In manufacturing, which accounts for 27% of investment in the economy and is the largest contributor, investments were down by 10% in the first quarter compared to the high base, holding back investment growth by 3.2 percentage points. Performance declined in most sub-sections, including the heavily weighted manufacture of electrical equipment and the rubber industry.

Investment volumes in transport and storage fell by 16%, a larger decline than in the previous quarter, with the negative performance still mainly driven by a slowdown in public infrastructure development. This area reduced investment volume growth by 2.0 percentage points.

Investment performance in agriculture, forestry and fishing was down significantly by 26% compared to a year earlier, partly because farmers bought fewer breeding animals. Agriculture thus held back the volume growth of investment in the national economy by 1.7 percentage points.

Performance and volume changes of investment in the national economy

Section 1st quarter of 2021 Quarters 1–4 of 2020
at current prices,billion HUF volume change, compared to the corresponding period of the previous year, % at current prices,billion HUF volume change, compared to the corresponding period of the previous year, %
Total1 9792.510 692-3.8
Of which*:
manufacturing544-10.12 716-8.1
real estate activities 39811.82 17316.1
transportation and storage 204-15.71 463-9.5
wholesale and retail trade, repair of motor vehicles and motorcycles12916.4553-9.3
public administration and defence; compulsory social security9332.6663-0.2
agriculture, forestry and fishing91-26.3464-6.9

*Data of the six largest weight carrying sections, based on investment performance of the 1st quarter 2021