Hungary Freight Transport Report Q4 2009

In a sign of the impact of the recession, Allami Autopalya Kezelo (AAK), the Hungarian motorway management company, said its sales of electronic motorway stickers (also known as vignettes) fell by 2% year-on-year in H109. This was the first time in five years that there had been an absolute fall in sticker sales. AAK's H109 revenue was also down, by 4% yoy. It calculated that overall motorway traffic had dropped by 5% yoy during the first half. Sales of monthly, weekly, and daily stickers for commercial vehicles dropped by 6%, 3% and 7% respectively; sales of annual stickers were unchanged. The only growth was registered in the sales of four-day motorway toll stickers, which rise by 1% on year-earlier levels.

Going forward, we expect rail freight growth to slow, as M??V works through its restructuring now that its cargo unit has been taken over by Rail Cargo Austria (RCA). As a result of all these and other small changes, we now expect total freight carried across all modes, measured in mntkm, to grow by an annual average of 1.2% across the 2009-2013 forecast period. However, MAV is modernising its fleet, and has recently agreed a deal for 30 FLIRTs from Swiss company Stadler. Improving speed and efficiency is crucial for the rail sector, in order for it to compete with road haulage. Presently, road is considered the quickest of the two transport systems, but rail networks are becoming faster, increasing their attractiveness. Also, rail is more environmentally-friendly, and therefore likely to receive greater government and EU support than the road sector. One huge disadvantage is the presence of powerful unions in Hungary's rail sector. In 2008 the VDSzSz union held strikes in February, April, July and December. According to our latest estimates, transport and communications GDP rose by 0.7% in 2008, 0.2pps faster than overall GDP, which we estimate to have increased by 0.5%. For the 2009-2013 forecast period, we expect that the transport and communications sector will outpace the economy as a whole, but again by a narrow margin. It will achieve average annual growth of 0.8%, versus 0.7% for overall GDP.

The total value of transport and communications GDP will rise to US$13.9bn in nominal terms by 2013, representing 8.7% of Hungary's GDP. The transport and communications sector employed 299,300 people, or 7.7% of the labour force, in 2008. We see the people employed figure falling marginally to 296,300 by 2013, although it will remain constant in relative terms at 7.7% of the total labour force (Hungary's labour force is dwindling slightly as the population ages).

As the central road building policy continues to be implemented, albeit at a reduced pace, and vehicle ownership continues to spread, road freight will see growth. Hungarian membership of the EU has helped boost international road haulage. The economic contraction that we project for the eurozone will be a particular problem for Hungarian exporters, as well as weighing on inwards FDI and bank lending. We expect average annual growth for 2009-2013 to reach 0.7%. Initially boosted by the surge in budget airlines, but now facing a downturn in the European air travel cycle, airfreight will experience an average annual increase of 1.1%. Our forecast for pipeline throughput is now 1.0%. Inland waterway and rail fright carried will grow at the slowest average annual rates, 0.3% and 0.9%, respectively.