Economic overview of Fejér county for the first half of 2016

Summary

Fejér county’s overall economy has experienced a very dynamic industrial expansion during the first 6 months of the year, figures indicating that the industrial production values per capita are twice that of the national average.

Investment levels have increased mainly in the manufacturing industry, most investments going towards aquistion of machinery.

Overall performance of the construction industry has seen a slight decrease, even though the number of employees has increased.

Employment rates within the county seem rather optimistic, however according to official statistics, the motor-, food and commerce industries are facing serious qualified worker shortages.

Industry

During the first half of 2016, industrial companies seated in the county of Fejér and employing at least 50 people have achieved a production value of 1080 billion HUF, which is an increase of 8.4 percent when compared to the previous year. As far as production value per capita is concerned, Fejér County residents reach 2.8 million HUF each, which is roughly double the amount of the national average. County rankings (including Budapest) reveal that Fejér County has achieved the 8th most dynamic rhythm of growth and development.

The bulk part of the overall industrial production, a total of 1059 billion HUF have been realized by manufacturing businesses, production in most branches having exceeded those of the first half of 2015, however the output values for the machinery industry have somewhat dropped. The performance of the metallurgy and metal processing companies show similar results when compared to the previous year, revenues reaching a total of 233 billion HUF. The electronics industry produces goods almost entirely destined for export and has increased its output volume by 45 percent and the automobile industry by 5.2 percent. This means a total production value of 225 for the former, and 214 billion HUF for the latter. Due to capacity and production expansions, the total production of electronic components has multiplied.

By the end of June, industrial production companies have achieved net revenues of 1094 billion HUF total, which suggests an increase of almost 10 percent compared to June 2015. Almost three quarters of the total revenues have been achieved from sales on foreign markets.

Companies seated in the county of Fejér with at least at least 50 employees, actively employ a total of 37 800 people, a decrease of 580 positions compared to 2015.  While the electronic industry has increased its workforce by 870 employees, the automobile industry had to cut 680 jobs, the metallurgy industry 300 and the machinery branch 180 jobs.

For each individual employee in the industrial field, production value reaches 28.6 million HUF per capita, an increase of 10 percent compared to the first half of 2015.

Investments

Commercial companies in the county have achieved a total investment level of 79 billion HUF, which shows an increase of 20 percent when compared to the same period of 2015. The most significant proportion of overall investments go to the manufacturing industry, investments having increased almost 10 percent compared to last year. The total amount of 48 billion HUF represents 61 percent of the county’s national investments.

As far as the manufacturing industry is concerned, investment levels have most sharply risen within the production of vehicle parts, companies having spent a total of 17.7 billion HUF on new machinery. Companies producing metal parts, as well as the electronic industry have also made significant investments, the total levels having increased by 7.1 and 6.1 respectively.

As far as the branch of administrative services is concerned, the national investment has been upward of 10.5 billion HUF: the seven-fold increase has been due exclusively to a multinational company’s capacity expansion.

Commercial companies have also increased their investments by one and a half times that of 2015, having spent a total of 5.5 billion HUF. The bulk part of this sum has been realized by foreign interest companies, who have increased not only their assets but also their real estate holdings. Agriculture has also seen a rise in investments in the amount of 3.2 billion HUF, the logistics and warehouse branches invested 2.3, real estate 1.7 and the construction industry 1.3 billion HUF.

Construction industry

During the final half of 2016, construction companies having their seat in the county of Fejér and employing at least 5 employees have achieved a production value of 15.1 billion HUF, which is the equivalent of 3 percent of the national production value and a drop of 9.9 percent during the course of a year. The performances of the two main branches of the construction industry have both dropped, building constructions having been most affected and dropping a total of 18 percent. Other edifices and specialized constructions however have not fared so badly but only companies active in road and rail construction could manage to raise their performance by 4 percent. In contrast to the overall decrease in production levels, employee numbers have increased from 3.300 to 3.900.

As far as signed contracts are concerned, the figures show a threefold rise, overall prospects for the near future looking rather optimistic, especially in the fields of public utilities. Standing agreement values for the first half of 2016 have exceeded those of the previous year with 5.5 percent, which is undoubtedly due to the increase in public utilities investments by the government.

Tourism, January-August 2016

Numbers indicate that until the end of August 182 thousand guests have spent a total of 417 thousand overnights in commercial establishments, four fifths being domestic tourists and 30 thousand being foreigners. Due in part to capacity increases, total figures show a definite rise compared to the same period last year: guest numbers have increased by 44 thousand, overnights by 90 thousand and foreign guests by 6 thousand.

The largest group of foreign visitors is represented by German nationals (5.4 thousand), Austrians (2.4 thousand) and Romanians (2.3 thousand). Altough vistitor numbers have risen, Austrian overnights have decreased. Numbers are more promising concerning Ucraine, visitors having tripled compared to the first eight months of 2015 and Slovakians have also been more active in this regard.

Foreigners have spent an average of 2.9, nationals an average of 2.2 ovenights.

The 30 hotels located in Fejér district have a total capacity of 3700 beds – which is three quarters of the district’s total. Six tenth of the total overnights of the first eight months, in other words 110 thousand guests and 240 thousand overnights have been spent in hotels. Booking numbers suggest an average occupancy rate of 46 percent and 61 percent in the month of August.

A megyei vendégkör 80 százalékát Velence, Gárdony és Székesfehérvár szálláshelyei fogadták. A vendégforgalom mindhárom településen élénkült (Velence kiugró mutatói elsősorban a már említett kapacitásbővülésnek köszönhetők), s ez döntően befolyásolta a teljes megye forgalmi adatainak alakulását. The most popular destinations seem to be Velence, Gárdony and Székesfehérvár, 80 percent of the district’s revenues going towards these destinations, Velence showing the biggest overall growth.

For the first eight months, commercial establishments have seen gross receipts totaling 4.9 billion HUF, six tenth from overnights and the one quarter from hospitality. Overnight revenues show an increase of 13, and hospitality profits of 9.4 percent when compared to the same period last year.

Gross Domestic Product

In terms of purchase price, in the year 2014 the county of Fejér has produced 1 326.3 billion HUF worth of gross domestic product (GDP), which essentially means that 4.1 percent of the national GDP has been produced in the region, thus placing the county on the 5th place in the national ranking.

The regional and territorial development is characterized by the levels and the fluctuation of the gross domestic product per capita. Specific indicators for 2014 come to a total of 3.2 million HUF, which is 2.8 percent less than the national average.

As far as the GDP per capita-based regional development ranking goes, the county placed 5th every year since 2006.

The individual economic sectors have a varying degree of contribution to the gross value added, which is defined by the structure of the county's economy. For several years now, the manufacturing industry represents the largest production sector: in 2014 47 percent of the county’s overall gross value added has been realized by this sector alone, which is well over the national average of 24 percent.

Thanks to the favorable agro-ecological characteristics, the agricultural branch was able to greatly increase its profit generating potential, having a share of 5.6 percent of the county’s total gross value added, which is also above the national average of 4.5 percent.

Considering the specific amount of purchasing power parities for 2014, figures reach 18 116 PPS which from the perspective of the EU member states, means two-thirds of the average level of development.

Commercial companies

According to data reported on June 30th 2016, there have been a total of 62 372 commercial companies registered in the county of Fejér, the biggest majority of which are enterprises (57 531), non-profit organizations representing 6.8 percent. The overall make-up of the companies´ is predominantly composed of small micro- businesses, joint enterprises consisting mostly of Ltd companies.  Figures reveal that almost all businesses in the county are small enterprises employing up to 10 people, while middle sized ones employing over 250 only reach a total of 47.

One in five companies listed their main area of activity as agriculture, while 16 percent are active in the field of real estate, 10 percent in trading and commerce and a further 10 percent in science and technology.

Changes in legislation, the forced strike off of companies has greatly contributed to a reduction in the number of liquidations. Figures suggest that there have been 25 percent less procedures for insolvency than during the same period of last year.

Labour market

According to the Central Statistics Office (CSO), during the second quarter of 2016 in the County of Fejér 198.2 thousand people were economically active within the population between the ages of 15-74. The participation rate is 61.2 percent, only 1.2 percentage points lower than a year earlier. Within the economically active population, both the employment and unemployment numbers have decreased over the course of the year. The unemployment rate thus fell below 3 percent, which is much lower than the national average, ranking third behind the counties of Győr-Moson-Sopron and Komárom-Esztergom.

Another group of about 126 thousand inhabitants are economically inactive people like students, pensioners, women on maternity leave and those who for various reasons do not enter the labor market.

Employment statistics

The Central Statistics Office (CSO) has collected and published the data regarding companies seated in the county and employing at least 5 people, budgetary institutions and a certain circle of the non-profit organizations. During the first half of 2016 121 thousand people were employed by these organizations, which is 1.1 percent higher than a year earlier. Nearly two-thirds of employees performed physical labour, 92 percent worked in the private sector and 75 per cent were employed full-time.

The county's overall employment statistics are heavily influenced by the production sectors, mainly by the industry and manufacturing. 35 percent of employees worked in the manufacturing sector (nearly 43 thousand), 2.0 percent less than during the previous year. The construction industry has also seen a 7.7 percent increase in headcount, as did the commercial, service, health education and administrative service industries.

Vages

For the period January-June 2016, average monthly gross earnings for full-time employees in Fejér County was 246 thousand HUF, not including bonuses and other benefits. The monthly net salary of full-time employees (HUF 164 thousand) have increased by 8.7 percent, which is above the national average considering the growth rate, but less than in the counties of Győr-Moson-Sopron és Komárom-Esztergom (not including the capital). Nevertheless, monthly net salaries still fall 8 000 HUF short of the national average.

Within the county's dominant manufacturing industry, the metallurgy and metal processing rank in the first place when it comes to salaries. Here, the average net income exceeded 250 thousand HUF, which is one and a half times that of the national average for the sector.

Job vacancies in the private sector

During the first half of 2016, companies employing at least 5 people had a total of 2 100 vacant positions, which is the highest rate of the past 5 years. In the private sector for every 100 filled and unfilled positions, more than two (2.31) vacancies opened, which is the highest rate in recent years. This also means that the labor demand of the private sector is growing faster than the number of available employees.

The vacancies within the industry occurred almost entirely in the manufacturing sector. Based on the number of vacancies, the demand for labor has increased the most in manufacturing and trade industries.

Jobseekers

According to the data published by the Ministry of National Economy, in June 2016 there were a total of 9200 registered jobseekers in the County of Fejér. Their numbers have decreased by 27 percent in one year.

12 percent of jobseekers are younger than 25 years of age and only 8.4 percent (770 people) are entry level, which is the lowest figure in years.