Agriseco Research believes that the focus on promoting public investment is expected to create spillover effects on many industry groups such as building materials, construction, residential real estate, industrial real estate and logistics.

In a recent report, Agriseco Research said that in 2023, economic growth drivers such as exports and consumption may slow down when the partner countries' economies are in recession and domestic consumption is unlikely to grow as strongly as the previous year. . In that context, public investment disbursement is expected to become a new pillar for economic growth in the coming period.

It is expected that there will be 4 key projects implemented and promoted this year, including the North-South expressway transition project phase 1; North-South Expressway Phase 2; airport, Long Thanh international airport; Ring 3. In which, the North-South expressway project phase 2 with 12 component projects started construction from January 2023. Long Thanh International Airport has completed site clearance, arranged resettlement and in 2023 will conduct construction of runways and terminals. Belt 3 project in Ho Chi Minh City has cleared 95% of the ground and is expected to start construction of this project by mid-2023. In addition, a number of projects such as Ring 4, Chau Doc and Khanh Hoa expressways are also expected to start construction in mid-2023.

According to Agriseco Research, the focus on promoting public investment is expected to create spillover effects on many industry groups such as building materials, construction, residential real estate, industrial real estate and logistics. Public investment is also considered a driving force for economic growth in the context that consumption and export drivers are affected by inflationary pressures, rising exchange rates and fluctuations in the global economy.

Typically, the building materials group will benefit directly right after the site clearance phase, from entering the project implementation until the project construction is completed. However, the characteristics of each industry make the level of benefits of enterprises different. With the steel industry, construction steel suppliers benefit. For industries where transportation costs have a great impact on the company's ability to consume products such as cement and construction stone, businesses with large market shares and located near ongoing projects will enjoy the benefits. outperform the rest of the industry.

The infrastructure construction group expects to directly benefit when key public investment projects come into operation. A number of key transport infrastructure projects such as the North-South Expressway Phases 1 and 2, and Long Thanh Airport will be deployed to help construction contractors (especially those with project construction experience). . However, the risk of the industry comes from the fact that the price of raw materials may increase again, in the context that China is opening its economy, increasing the demand for steel consumption. Weather at the beginning of the year is still likely to rain. much, affecting the overall construction progress, but this risk can be removed in the second half of the year when the probability of sunny weather is higher.

Next is the real estate industry, Agriseco believes that this industry can benefit indirectly as soon as the planning of large public investment projects is approved. This will attract demand for real estate and housing in neighboring areas and provinces with projects when the infrastructure is expected to be completed. However, it should be noted that besides, the real estate industry is also facing many other risks such as corporate bonds, legal amendments, and tight credit policies. Indirect benefits from public investment can hardly neutralize the above risks in the short term. Therefore, this analysis team maintains a cautious view for this industry group.

Meanwhile, the industrial zone real estate group expects to attract more FDI inflows into industrial parks when the transportation and highway infrastructure is completed, which will help increase connectivity between regions and industrial zones. In 2023, industrial real estate will continue to benefit from capital flows from factory relocation, signed FTAs, and policies to attract FDI.

"However, new FDI inflows into Vietnam may not be able to recover quickly when the global economy fluctuates and inflation increases, affecting investment flows of countries. Therefore, the group of businesses benefits. The advantage of available land for lease and stable financial capacity is expected to benefit," forecasted Agriseco Research.

In addition, Agriseco Research assessed that the logistics industry is expected to benefit indirectly when public investment is promoted and infrastructure is improved. Once completed, the expressways will make logistics activities much more convenient, thereby being a catalyst to promote economic growth and attract foreign investment. Large projects such as Long Thanh Airport are also expected to help the freight and passenger transport group benefit from increased operating capacity.

Source: CafeF