Fulcrum for construction and materials industry

Focus on completing infrastructure system

In Resolution 01/NQ-CP on the main tasks and solutions to implement the Socio-Economic Development Plan and State Budget Estimates for 2025, we can see the great determination of the Government to promote economic recovery and growth.

In order to successfully implement the goals and tasks of the socio-economic development plan for 2025 and the entire 5-year period of 2021 - 2025, the Government requires all levels, sectors and localities to focus on directing and operating, achieving GDP growth of the whole country in 2025 at least 8% and striving for double digits in more favorable conditions (higher than the target set by the National Assembly of 6.5 - 7%, striving for 7 - 7.5%), the GRDP growth target of localities in 2025 is at least 8 - 10%.

The construction materials industry has flourished due to increased infrastructure investment in the past year. Photo: Hai Linh

In particular, completing a synchronous and modern strategic infrastructure system, prioritizing key and important national transport infrastructure projects, expressway systems, high-speed railways; inter-regional projects and large urban infrastructure, digital transformation infrastructure...

Concentrate resources and strive to achieve the goal of having 3,000km of expressways and over 1,000km of coastal roads nationwide by 2025. Focus on removing difficulties and obstacles in implementing large-scale infrastructure projects; ensure the supply of raw materials, control raw material prices, and land use targets to speed up progress and ensure the quality of expressway projects.

There are breakthrough, practical and effective solutions, especially policies and mechanisms to attract investment in infrastructure projects under the public-private partnership model; at the same time, report to competent authorities for approval of policies, mechanisms and mechanisms to completely resolve existing problems and obstacles in a number of investment projects under the public-private partnership model. Focus on effectively implementing the Plan to implement the Power Plan VIII and the Plan to mobilize resources to implement the Political Declaration on establishing the Fair Energy Transition Partnership (JETP)...

Focus on developing cultural, educational, and healthcare infrastructure to respond to climate change. Develop agricultural and rural infrastructure to serve the restructuring of the agricultural sector in conjunction with new rural construction. Prioritize irrigation works, dykes, dams, reservoirs... that are weak, damaged, at risk, and at risk of being unsafe. Continue to invest in renovating, upgrading, and building new fisheries infrastructure; irrigation infrastructure to serve agricultural production...

 

2025 still has many potential risks for construction material enterprises, especially in terms of raw material prices, of which coal - the main fuel in production - is increasing (spending 7.29 billion USD to import 60.6 million tons of coal) and electricity is expected to increase in price from 2.41 - 3.34% when implementing the new retail electricity price structure. These are the two factors that account for the largest proportion in construction material production.

Construction materials expert, master Pham Ngoc Trung

In the 2025 strategy report, SSI Research Center for Analysis and Investment Consulting stated that 2025 promises to open up strong supporting factors after a long period of waiting and expecting change, when Vietnam begins to enter a new era - the era of national development. The new era also means having to prepare for unprecedented changes.

Among them, there are reforms that have started since the end of 2024, such as streamlining the Government apparatus or the determination to accelerate public investment in infrastructure and solve outstanding problems in the real estate sector.

According to SSI Research, if successful, these will be three domestic factors that can help boost growth in 2025. Current reforms are aimed at creating a better investment environment in Vietnam, with a vision of shortening administrative procedures and improving infrastructure efficiency.

Leverage from public investment

VinaCapital Investment Director Dinh Duc Minh said that looking back at 2024, economic growth exceeded expectations when GDP increased by nearly 7.1% (compared to the forecast of 6% in early 2024). The driving force for Vietnam's economic development in 2025 will come from domestic public investment and the Government's infrastructure investment with great determination. Accordingly, consumer, construction, and building materials industries are likely to attract cash flows from investors.

The expressways, Long Thanh airport, Metro in Ho Chi Minh City... were completed last year. Without the highest determination of the Government in every direction and action, the projects would hardly be put into operation.

Besides, the National Assembly has approved the growth target of 6.5 - 7%, striving to achieve a growth rate of 7 - 7.5%, Mr. Minh hopes that Vietnam can complete this target.

According to the analysis group SSI Research, in order to achieve double-digit GDP growth as targeted by the Prime Minister, accelerating public investment, especially upgrading infrastructure and recovering the real estate industry, will be two investment topics in 2025.

In addition, supportive policies are expected to significantly increase real estate supply in 2025, in Hanoi, Ho Chi Minh City as well as other provinces. The government is working to reduce the licensing time for new projects and resolve legal problems of existing projects. At the same time, domestic consumption momentum, which has been significantly affected by the long-term stagnation of the real estate market, may need more time for consumers to regain confidence and consume again.

Therefore, Vietnam's economic growth in 2025 is expected to come mainly from investment and production, rather than from short-term consumption. Therefore, the analysis team has a more optimistic view on the construction, building materials, residential real estate and information technology industries in 2025.

Experts at ACB Securities (ACBS) believe that, along with the increase in public investment, enterprises in the fields of infrastructure construction, construction materials such as steel, cement, asphalt, logistics, civil real estate and industrial parks are expected to benefit. For example, the North-South Expressway Phase 2 project with a total investment of VND146,990 billion, 729km long, has started construction since 2023 and is expected to be basically completed in 2025, operating from 2026. Accordingly, large enterprises such as Vinaconex, Deo Ca and CIENCO 4 have been appointed as contractors and the 2025 - 2026 period is considered the "profit drop point" of these enterprises.

Along with that, some other key projects such as Long Thanh airport, Ho Chi Minh City Ring Road 3 and Hanoi Ring Road 4 are also being accelerated. In particular, the North-South high-speed railway project with a total investment of 67.3 billion USD is expected to start construction in 2027 and be completed in 2035, creating a construction market worth 33.5 billion USD, opening up great opportunities for enterprises in the infrastructure and materials construction industry.

According to experts, public investment has made progress recently. Several large-scale projects are being added to the public investment list, and the BT (build and transfer) model will be re-deployed in 2025. This is important to attract private sector participation in infrastructure projects. Streamlining the apparatus will reduce the Government's recurrent expenditure and help increase public investment capital.

Source: https://kinhtedothi.vn/dau-tu-co-so-ha-tang-diem-tua-cho-nganh-xay-dung-vat-lieu.html