Thanks to the efforts to control and prevent the spreading of Covid-19, Vietnam’s economy has a chance to return to its development momentum. Grasping opportunities, Industrial Construction Enterprises also gradually recover and transform investment structure of projects.
Vietnamese Socio-Economic Context in November, 2020
Commercial agreements in 2020 have paved ways for economics development. Appropriate anti-pandemic strategies also help Vietnam to escape economic depression. Therefore, Vietnam has become one of the four economies who enjoys positive growth in 2020.
IMF has predicted Vietnam GDP could grow 2.4% in 2020 which is far below its value of 7.02% the same period last year. But this number is encouraging in the global pandemic scene where almost all big economies are experiencing negative growth.
Investment value in new industrial construction projects gradually recovered
Since the epidemic broke out in March 2020, the socio-economic context has been fluctuating, strongly affecting the construction investment of enterprises, especially for FDI projects.
May 2020 recorded the biggest decrease in both number of projects and total investment value with the rate of 30% and 70% respectively. These indicators then gradually recovered as social distancing orders were gradually lifted and the government established a “new normal state during a pandemic”, reaching levels comparable to March.
A large number of industrial construction projects are on verge of implement
After a relatively quiet time, from September 2020, after Vietnam basically controlled the epidemic, businesses are on the verge of implementing a large number of new industrial construction projects. Specifically, 962 industrial construction projects are being gradually put into operation in November 2020, investment values rocketed after the formation of large-scale energy and industrial infrastructure projects. The total investment value as of November 2020 is about US $ 66 billion, adding an increase of 56% compared to July.
While the epidemics have complicated progress in the world, Vietnam still recorded a huge increase in the number of industrial construction projects and the total value of FDI investment from September to November 2020. After the Da Nang outbreak was controlled, entry regulations of foreign experts were loosened, investment promotion has become less stressful compared to previous months.
Proportion of industrial construction investment has changed in new social context
Before the epidemic broke out, textiles – ancillary equipment – electronics accounted for half of the total value of ongoing industrial projects. The complicated epidemic situation around the world changed the consumption habits, causing investors to make changes in the proportion of investment in industries: the investment value of textile projects as of November 2020 was only 870 million USD, 25% lower compared to that figure in March, 2020.
The escalating US-China trade tensions created pressure, causing electronics manufacturers to shift their production to Vietnam. The investment value of electronic projects under construction as of November 2020 increased by 55% compared to before the outbreak (March 2020).
Applying drastic anti-epidemic measures, policy of not freezing the economy and policies to promote recovery open up opportunities for Vietnam economy in general and for the industrial construction industry in particular, although it will take a long time for the country to revive growth rates as before the pandemic.
The above figures are researched and reported by HOUSELINK’s economic research and construction experts.
To see detailed report, click here