The price of steel increased from VND106,000 (US$4.6) per ø10 rod in 2021 to VND136,000 ($5.9) now. Similarly, the price of construction sand rose from VND240,000 ($10.5) per cubic meter to VND450,000 ($19.7) in 2022.
Recently, Thai Nguyen Iron and Steel JSC. has announced its price adjustments. At present, the price of CB240 steel rod is VND17.3 million ($755.8) per tonne. Other companies in the field like Hoa Phat, Viet Duc, Vinausteel has followed the footstep.
As predicted by a construction material shop owner on Le Duc Tho Street in Go Vap District, there might be two or three price rise times in the upcoming time. She was seriously concerned by the severe financial impact these price increase may create on both material shops and contractors. She even thought about the situation when construction materials become so expensive that building projects have to temporarily halter.
Deputy Director of Tran Anh Group Ha Van Thien informed that the cost of materials accounts for 60-70 percent of a construction contract. Therefore, such considerable material price rise could increase the overall contract cost by 20 percent. This will lead to the end-product price going up by 10-20 percent, depending on the financial burden sharing of investors.
What is more, investors and contractors of any inclusive building contract may face financial loss in the current price soaring situation, or compensation for contract breach if stopping the work. Hence, Mr. Thien hoped that functional agencies consult related ministries to devise feasible solutions to aid construction businesses.
Vietnam Association of Construction Contractors has recently proposed that the Government implement suitable solutions to ease the burden of remarkable steel price rise, negatively affecting the overall construction cost.
Another urgent issue is the wage rise from VND450,000 ($19.7) a day to VND500,000 ($21.84) for construction workers to retain sufficient human resources. Other staff members like security guards also demand a wage increase as well.
“The increase of both construction material price and employee wage might lead to smaller-scaled works and projects. However, construction companies still have to maintain their overhead costs. This is financially dangerous in a long term”, said General Director of Viet Phu An JSC. Dang Van Thanh.
