HANOI, June 12 (Xinhua) -- Vietnam's building materials industry warned of a challenging 2023, with many suppliers on the verge of bankruptcy, due to slow progress in public investment and weakness in the property market, Vietnam News reported on Monday.
Industry experts at a conference held by the Vietnam Institute for Building Materials highlighted the impact of an economic downturn on construction, imperiling the delivery of new homes and infrastructure projects.
Construction projects are slowing on tighter credit and legal roadblocks, said Le Quang Hung, chairman of the Vietnam Concrete Association.
Data suggested the appetite of developers to take on new projects was diminishing fast.
In the January-March period, the number of newly-licensed housing projects plummeted 56 percent, existing development projects plunged 43 percent, and completed property projects fell 36 percent from a year ago, according to the Housing and Real Estate Market Management Agency under the Ministry of Construction.
New property companies that opened in the first five months of this year plunged 61.4 percent from a year earlier, and more than 550 companies were dissolved, up 30.4 percent over the period, according to the General Statistics Office.
Vietnam's builders, grappling with funding woes, have suspended more than a thousand projects worth 800 trillion Vietnamese dong (33.7 billion U.S. dollars), said the Vietnam National Real Estate Association.
Meanwhile, Vietnam has been slow in disbursing public investment funds. Data compiled by the Ministry of Finance showed only 14.7 percent of the targeted disbursement amount for 2023 has been disbursed to date, lower than the rate of 18.5 percent a year ago.
Public investment, which often accounts for around one fifth of Vietnam's total investment, is mainly spent on infrastructure and social development projects to boost economic growth.
Steel production and consumption has been on a decline so far this year, said Dinh Quoc Thai, deputy chairman of the Vietnam Steel Association.
Local steel makers are betting on governmental efforts to accelerate public investment and support the property sector as they expect production to rise by only 2-3 percent this year, he added.
The production output of the ceramic industry has dropped by 30-35 percent, or about 50-60 percent of the total manufacturing capacity, said Dinh Quang Huy, chairman of the Vietnam Building Ceramic Association.
A quarter of about 1,000 listed companies, with many in the real estate and building materials sector, recorded net loss in the fourth quarter of 2022, according to data provider Fiin Group.
Pham Van Bac, head of the Building Materials Department under the Ministry of Construction, said the deteriorating macro environment is clearly taking a toll on the construction industry.
The production output has remained about 10-30 percent higher than the local demand, he added, urging companies to cut costs and adjust their production plan amid challenging market conditions. ■
