Hungary

General economic overview

In 2021, the volume of GDP grew by 7.1% compared to the previous year and by 2.1% compared to 2019 according to raw data.

According to the first estimate the value of GDP was 154,124.4 million EUR (55,256 billion forints, 358,52 HUF/EUR) at current prices, its volume increased by 7.1% (according to both raw and calendar adjusted data).

From the production approach, value added became 9.8% higher in industry, 15.8% larger in construction and 6.2% higher in services and 2.2% smaller in agriculture.

Services contributed by 3.6 percentage points, industry by 1.9 percentage points and construction by 0.7 percentage point to the increase of GDP. Agriculture lowered GDP growth by 0.1 percentage point.

From the expenditure approach, the actual final consumption of households rose by 4.3% and the actual final consumption of the government by 4.8%, as a total result of which the volume of actual final consumption became 4.4% larger. Gross capital formation grew by 8.7%, within which gross fixed capital formation by 6.0%. The volume of exports increased by 10.1% and that of imports by 8.2%.

From the expenditure approach, actual final consumption contributed by 3.1 percentage points, gross capital formation by 2.4 percentage points and the balance of external trade as a whole by 1.7 percentage points to the growth of the economy. 

In 2021 compared to the lower base of previous year, being affected by the pandemic, the volume of investments in the national economy increased by 4.2%, within it the volume of construction investments grew by 3.7%, investments in machinery and equipment expanded by 5.3%. The increase of investment prices (+9.8%) reached the highest level since 1998. Considering the year as a whole, investments increased in the overwhelming majority of sections. Among the most important investing sections, investment grew by 9.5% in manufacturing, which accounts for more than a quarter of performance value, and by 14% in transport and storage, in contrast, in real estate activities, which account for nearly one fifth of investments in the economy, the volume fell by 6.1%. These three sections accounted for nearly six-tenths of investment.

In 2021, the average number of people in employment increased by 31 thousand to 4 million 635 thousand, and the employment rate for people aged 15-64 was 73.1%, 1.2 percentage points higher than a year ago. The number of people working in the primary labour market increased by 58 thousand, while the number of people declaring themselves as public workers decreased by 6 thousand and that of people working abroad by 21 thousand. With the exception of 15-24 year olds, who saw a 0.5 percentage point decrease, all main age groups saw an increase in employment rates. The most significant increase was observed in the 55-64 age group, where the employment rate rose by 3.2 percentage points to 62.8%, while the rate for the 25-54 age group increased by 0.7 percentage points to 87.0%.

In 2021 the average number of unemployed people was 196 thousand, with an unemployment rate of 4.1%, essentially the same as a year earlier. The number of unemployed was 100 thousand for men and 96 thousand for women, with unemployment rates of 3.9% and 4.2% respectively.

For the year as a whole, the average duration of job search was 8.4 months and the share of jobseekers who had been looking for a job for at least a year was 31.2%.

In 2021, full-time employees’ average gross monthly earnings (as defined by the Hungarian Central Statistical Office) – at enterprises employing at least 5 persons, at budgetary institutions and at non-profit organisations that are significant in terms of employment – reached EUR 1223,92 (HUF 438,800), average net earnings amounted to EUR 814 (HUF 291,800) excluding tax benefits, both rising by 8.7% compared to 2020. 

Average gross earnings in the business sector reached EUR 1257 (HUF 450,800), in the budgetary sector EUR 1143 (HUF 409,900), and in the non-profit sector EUR 1169 (HUF 419,100), representing growths of 7.8%, 9.5% and 15.4%, compared to the previous year. The highest average gross earnings were recorded in the financial and insurance activities section (EUR 2116 - HUF 758,700) and the lowest ones for accommodation and food service activities (EUR 746 - HUF 267,500). In construction the average gross monthly earnings were EUR 975 (HUF 349,636).

Real earnings rose by 3.4%, along with a 5.1% year-on-year increase in consumer prices.

Overall construction activity

In 2021 the output of construction was 15.03 billion EUR (5388.9 billion HUF) at current prices, which surpassed the low base of 2020 by 13.3%. In the year as a whole, construction producer prices were 11.4% higher on average than in the previous year. In the entire year of 2021 the construction of buildings was up by 17.1% and civil engineering by 9.1%. In 2021 the amount of contracts concluded were 0.4% higher than in the previous year, within it 4.3% fewer for buildings and 5.9% more for civil engineering works. 

The volume of the end-of-December stock of contracts at construction enterprises was 13.1% below the end-of-December-2020 level. The volume of contracts was down by 13.9% for the construction of buildings and by 12.5% for civil engineering, year-on-year.

In the 4th quarter, construction producer prices rose by 16.7% compared to the same period of the previous year. Within the divisions of construction, prices increased by 19.1% in the construction of buildings as well as in the greatest weight carrying specialized construction activities, and by 11.1% in civil engineering compared to the 4th quarter of 2020.

The 4th quarter’s construction prices were 4.6% higher than in the previous quarter.

Residential construction

In 2021, 19,898 new dwellings were built, 29% less than a year earlier. Based on issued dwelling construction permits and simple declarations, the number of homes to be built increased by 33% to 29,941 compared to 2020. 

In Budapest, 7,038 dwellings were built, 11% more than in 2020. In all other settlement categories, the number of dwellings put into use significantly decreased: by 47% in towns of county rank, by 33% in other towns, and by 45% in villages. 

The share of dwellings built by natural persons decreased from 47% to 35%, while the share built by businesses increased from 52% to 64% compared to 2020.

The share of dwellings built for owner-occupation fell from 45% to 34%, while the share of dwellings built for sale increased from 53% to 64% compared to the previous year. 43% of the new dwellings put into use in residential buildings are in detached houses, 51% in multi-storey, multi-dwelling buildings and 3.3% in resident’s parks.

The average floor area of dwellings put into use decreased by 7.3 m2 to 90.7 m2 compared to 2020.

The number of dwellings to be built on the basis of construction permits and declarations was 29,941, 33% more than a year earlier. The trend in the number of building permits is the opposite of the trend in the number of dwellings put to use: only in Budapest did the number of dwellings to be built decrease (by 14%), while the number increased in all other settlement categories. The increase was 35% in towns of county rank, 58% in the other towns, and 55% in villages.

The number of dwellings to be built increased in all counties outside Budapest compared to the previous year. For the first time since 2014, the number of dwellings to be built in Pest County (7.7 thousand) exceeded that of the capital (5.5 thousand).

Builders made use of the simple declaration option in 66% of cases. This rate is lowest in Budapest at 25% and highest in villages at 90%.

A total of 16,531 residential buildings are planned to be built, a 45% increase compared to 2020, issued new construction permits show. 79% of them, a total of 13,133 units, are one-dwelling residential buildings.

5,021 permits were issued for non-residential buildings, an increase of 25% compared to a year earlier. The increase was 28% in the category of industrial buildings, 40% in agricultural buildings, and 57% in commercial buildings.