Investments in manufacturing were unchanged in the first quarter in comparison to the same period of the previous year after the outstanding increase of the year 2011, but in certain significant sub sectors there was substantial growth – according to the communication of the Central Statistics Office of Hungary (KSH) published earlier this morning.

Investments increased in the manufacturing of machinery and equipment, transport equipment and electrical equipment. The significance of these sub sectors has been aptly demonstrated by the fact that the value of their output amounted to more than 31 percent of total manufacturing output last year, and this trend (which has the most favourable impact on the manufacturing of transport equipment) appears to continue in the first quarter of this year as well. The below chart demonstrates the trend of rising investments in manufacturing in the past couple of quarters.



Source: KSH

As the data imply, if the outstanding increase of manufacturing investments of Q1 2011 is taken as a base, the amount of investments in the current quarter almost reached the same level. There was also growth in several other sectors of less influence of the national economy: the largest increase of almost 28 percent was achieved by the hotel trade and catering sector. In the sectors of public administration, defense and compulsory social security system investments were slightly below the above figure but still high at almost 22 percent, which result was mostly due to flood prevention projects. In addition, growth could be registered in comparison to the base quarter in the investments of financial and insurance services, trade and vehicle repair services as well as in the fields of professional, scientific and technical activities, which are significant from the viewpoint of innovation.

On the other hand, several large projects were completed in this quarter, therefore the level of investment in these sectors registered substantial decline. That is why the volume of investments in education related to the national economy and investments in the energy industry and mineral oil and gas production decreased substantially. In addition, due to the lower level of investments in the improvement of the institutional system which utilized EU funding the volume of investments in the human-healthcare and social care sectors were also lower.

As a whole, in Q1 2012 the volume of investments in the national economy declined by 8.6 percent compared to the corresponding period of the previous year. In case the previous quarter is considered a reference base, the decline in investments is smaller at 4.2 percent.

(Nemzetgazdasági Minisztérium)