Examination of the property, financial and profitability situation in the construction industry in Hungary: regional comparison

Abstract

The construction industry is an important branch of the national economy, the structure of which in Hungary is characterized by strong fluctuations. In Hungary, as a result of the government's family support measures, construction companies have faced a significant increase in demand in recent years. This effect was uneven in different statistical regions of the country, but affected the property and financial condition of construction enterprises throughout the country. Starting from 2020, the COVID-19 epidemic has in several cases negatively affected the studied indicators of the construction industry. The article substantiates the need and methods of economic analysis of the state of the construction industry, investigates the property and financial condition of construction enterprises at the national level and in three less economically developed regions of Hungary. Similarities and differences in the values of indicators of the structure of assets, liquidity, profitability and efficiency of enterprises of this industry in certain regions compared to national indicators, as well as possible reasons for the existing state, are considered. The study covered the period of 2016-2020, and the statistical sample took into account the organizational and legal form, the size of assets, turnover and the number of employees of enterprises. Only those companies that worked continuously during the studied period were included in the statistical sample. On the basis of the conducted studies, it was established that the share of current assets in the assets of the investigated construction enterprises has a tendency to decrease. At the national level, the expansion of borrowing capacity and favorable credit conditions have resulted in significant indebtedness, although, in addition to bank loans, liabilities to suppliers have also played a large role. On the basis of the study, it was concluded that the three studied regions are characterized by very similar phenomena of a financial nature, but significant deviations from national values were found for several indicators (e.g. capital strength).