Analyst Pin-board Construction stocks: Opportunity is rare due to the lack of growth engines
According to the General Statistics Office (GSO), the construction market went up by less than 5% in 1H2020, the lowest in the last five years. Apart from the impacts by COVID-19, the market has been lacking growth engines for a long time. Residential real estate used to be the major growth driver but is currently sluggish because of very few new projects. New launches in HCMC went down by 60% YoY in 2Q2020, while Hanoi and HCMC, the two largest urban areas in the country, collectively launched only 18 new projects in the last quarter, which is a record low number. Now that COVID-19 dampens future demand, international travel bans have put immediate pressure on tourism and the resort market. Many new commercial and industrial projects have been postponed because of the difficulties in mobilizing workers and devices. During the difficult time like this, fiscal spending on infrastructure is expected to save the market, yet we have yet to see the immediate effect since many large projects are still in the bidding process and cannot carry out construction.
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