HANOI: Domestic construction companies will continue to face difficulties in the second quarter of this year with capital shortages being their top problem, a report says.

Up to 42.2% of surveyed firms said they met more difficulties in the first quarter (1Q); 41.5% said their business operation were stable and 16.3% experienced better business in 1Q, according to a General Statistics Office report.

For 2Q, 27.1% anticipated their business operation would be more difficult; 40.7% expected stable business and 33.2% foresaw better business performance compared with 1Q.

Amid the current landscape, 46.4% of enterprises called on capital support such as preferential loans, more convenient and faster loan procedures, and reduced interest rates.

Meanwhile, 44.3% suggested assistance in raw materials such as ensuring supply and stabilising raw material prices; 38.3% expected that bidding information would be more open and transparent; and 32.9% emphasised the importance of speeding up administrative reforms.

Another survey by business news site Vietnam Report also showed that 55.6% of construction enterprises encountered difficulties in terms of working capital.

Bank credit has expanded, and interest rates have decreased, but construction firms, especially small and medium companies, still found difficulty in accessing loans as their financial conditions failed to meet the requirements of commercial banks.

Experts said that to ease the difficulties for the construction industry, it was necessary to solve some major problems such as reducing costs, improving the competitiveness of businesses and boosting the investment and business environment

Creating more favourable conditions for the firms to get bank loans and facilitating their market access should be also included, they said.

The nation’s construction industry faced considerable challenges in 2023.

Rising material prices, higher debt among builders, and dampened demand during the pandemic all resulted in the downfall of hundreds of construction firms in the Vietnamese market in recent quarters.

 - ANN