Database of building materials to be set up in Hungary

In November 2024, multiple sources reported that the Hungarian government is considering the introduction of significant construction regulations in 2026, based on a leaked draft.

A key element of the plan involves the creation of a new database called the National Construction Industry Register (abbreviated as NÉNY in Hungarian). This database would require manufacturers, traders, and contractors to submit detailed data on building materials, aiming to enhance transparency, streamline supply chains, and strengthen the overall resilience of the construction sector. If implemented, these regulations could bring substantial changes to the building materials market, particularly in terms of supply security for the construction industry and the management of strategic building materials.

The proposed regulations could significantly impact the building materials market, particularly in ensuring supply security and managing strategic materials. However, the concept of NÉNY is not new. The creation of this database was outlined in the already adopted Act C of 2023 on Hungarian Architecture. With the legal foundation in place, the focus has shifted to implementing government decrees now taking shape.

Business Concerns and Regulatory Implications

While NÉNY aims to centralize critical data: domestic production, prices, technical specifications and stakeholders, the business community is wary of the documentation burden and the state's expansive oversight. The database could require billions of forints in IT investments. Foreign firms are particularly concerned about potential regulatory measures, such as export bans and state first-refusal rights on strategic materials or even production facilities. The Ministry of Construction and Transport has acknowledged that these measures could be included in the regulations, but clarified that existing laws already permit such interventions. For example, the state can currently ban the export of strategic materials for up to one year to safeguard supply security. Additionally, under certain conditions, such as extreme price increases or production disruptions, the state has a right of first refusal on strategic materials.

Experts note that while these powers are intended for emergencies, the question is whether the permanent Hungarian emergency situation can already be a reason for preemption. Because, if so, it is not viable for Hungarian companies to trade in the future by waiting for a month after their contracts to see whether they can sell the product or whether the state will demand it.

Potential Impact on Strategic Production Facilities

The leaked draft also suggests that the state may extend its right of first refusal to the sale of production facilities. Owners of strategic material producers would need to offer their assets to the state first, a measure seen in other sectors that often devalues companies by discouraging buyers wary of wasted due diligence efforts.

Industry Consultation and Outlook

The Ministry has been in discussions with various professional organizations, including the National Association of Hungarian Building Contractors (ÉVOSZ), the Hungarian Chamber of Engineers, the Hungarian Chamber of Architects, and the Nonprofit Association for Quality Control in Construction (ÉMI). Although the draft has not yet been formally discussed at a government meeting and does not reflect the official stance, if implemented, it could reshape the building materials market in several significant ways.