In European construction markets during 2002, "total construction output reached zero growth overall and decreased by 0.2%" in real terms, said Anna Gáspár, a top Hungarian construction official. She attributed this to "increasing uncertainty following the Iraq conflict, budget reforms in many European countries, growing unemployment and a pessimistic business outlook." But she claimed that public works fared somewhat better, increasing by 1.3%. "For the years 2004-2005, a significant growth is forecast both in GDP and construction output," said Gáspár.

BOOMING? Hungary project is one of many to come.

Pekka Pajakkala, of VTT Building Technology, Construction and Management Research in Finland, predicted that infrastructure markets in central and eastern Europe would grow 9% and 13%, respectively, in 2004 and 2005 to improve transportation infrastructure to European Union standards.

A lot of the action will take place in the 11 Southeast Europe countries—Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Moldova, Romania, Serbia and Montenegro, Slovenia, Turkey and the autonomous territory of Kosovo, said Gáspár. There currently are 46 transportation, energy, water and environmental projects under way or set to begin in that region. "It’s one of the fastest developing regions in terms of GDP growth, and it will be a challenge to the international business and investment community," she said.

Competition for contracts is expected to be rigorous after the anticipated economic upturn and firms already are jockeying for position. "We’ve already received three or four letters from Western firms who are interested in joint ventures," reported Attila Beder Horváth, marketing director for KÉSZ Kft., a major Hungarian design-build firm.

Josef F. Bleckenwegner, a senior loan officer with the European Investment Bank, said that U.S. firms could be competitive in the region. The bank is providing 75% of financing for Budapest’s new light-rail line, set to be one of Hungary’s largest infrastructure projects.