An Overview of Vietnam’s Construction Industry

The construction industry in Vietnam plays a crucial role in the economy, closely interacting with social fields and making significant contributions to national development.

Sector Segmentation and Construction Activities in Vietnam

Construction projects focus on housing and non-residential infrastructure, especially due to the rising demand for affordable housing. Additionally, building materials have rapidly expanded, with significant production value, taking up a large share of Vietnam’s GDP. This progress propels the construction industry as a vital economic driver.

Vietnam’s construction sector is entering a robust development phase, particularly with the rise of bridge and road construction activities, residential building, and infrastructure development.

Construction Sector Segmentation

The construction industry in Vietnam is divided into three main segments:

• Bridge and Road Construction: Involves various activities from formwork and concrete pumping to earth excavation, steel fixing, and scaffolding. It’s a foundation for developing transportation infrastructure that supports economic growth.

• Residential Construction: Entails tasks such as plastering, roofing, earthworks, interior finishing, and insulation spraying. This segment primarily addresses residential projects, which are receiving significant investment due to rising housing demands in urban and developing areas.

• Utility Installation: Focuses on installing systems like telecommunications lines, pipelines, and insulation, enhancing the efficiency and sustainability of construction operations.

Construction Activities

Construction activities in Vietnam are bolstered by the development of crucial infrastructure projects, including housing and transportation. Significant public and private investment propels the construction industry as an economic growth engine with a stable growth outlook.

Development Trends

In 2024, the construction industry is expected to experience significant growth with an anticipated 7.5% increase. Construction projects promise to transform urban spaces and meet market demands. The period from 2025 to 2028 also expects an average annual growth rate of 6.7%. Regions like the Red River Delta and Southeast have been driving remarkable breakthroughs due to robust infrastructure development.

Growth Landscape of the Construction Industry

The construction industry is projected to grow by approximately 7.5% in 2024, driven by investments in transportation, housing, and energy. Growth forecasts from 2025 to 2028 illustrate an average annual increase of about 6.7%. These figures demonstrate that construction is a pivotal sector for economic development.

Stepping into a new growth phase from 2025, Vietnam’s construction sector benefits from a multitude of positive factors. This not only fuels Vietnam’s economy but also encourages robust construction investment opportunities.

Growth Drivers

• Favorable Economic Environment: 2025 is anticipated to see Vietnam’s economy grow over 8%, offering a positive boost to the construction market.
• Legislative Reform: Amendments to key laws like the Land Law, Housing Law, and Real Estate Business Law promise to resolve long-standing issues, thereby spurring demand and construction activities.
• Flexible Investment Mechanisms: Resolution number 171/2024/QH15 relaxes the effective use of zoned lands, paving the way for new waves of investment in the sector.

Growth Rate

• Growth Projections: The construction industry is expected to achieve a growth rate between 10.7% and 15% in 2025.
• Growth Basis: From 2013 to 2023, the industry consistently maintained impressive growth with a CAGR of 11%, driven by strong industrialization and urbanization processes.

Growth Segments

• Infrastructure Construction: Large-scale infrastructure projects are underway, playing a leading role in the industry’s growth.
• Industrial and Residential Construction: These two segments continue to grow from the latter half of 2024 through 2025, yielding strong financial outcomes for businesses.

Challenges and Opportunities

• Challenges: Small enterprises struggle with capital recovery and face intense bidding competition due to the impact of previous market phases.
• Opportunities: The year 2025 is seen as a golden opportunity for domestic firms to rise strongly, taking full advantage of favorable conditions and new policy support.

Trends and Challenges in the Construction Sector

The construction sector is experiencing rapid growth trends in transportation, renewable energy, and residential construction. However, the biggest challenge is enhancing linkages and cooperation in the industry’s value chain to boost competitiveness and leverage the market’s vast potential.

Confronted by significant trends and challenges, especially amid the robust development of green industrial zones, the Vietnam Construction Industry aims towards 2025-2030, prioritizing eco-friendly zones with increasingly stringent building standards. This marks a substantial opportunity as businesses invest in new technologies and workforce to ensure sustainable development.

A key highlight is public investment, expected to surge in 2025. Supported robustly by legal elements and improved material supplies, this could accelerate sector growth. The industry is preparing for crucial infrastructure projects, targeting a growth range from 10.7% to 15% in 2025.

Nonetheless, the industry faces significant challenges regarding materials. The shortage of supplies, especially in the southern area, poses considerable obstacles for many projects. This necessitates quick adaptation in supply chain management.

Moreover, stringent construction regulations put greater responsibility on businesses to address project management needs and ensure project quality. These are vital for stability and growth amid current market dynamics.

Finally, green industrial development is not just a trend but a long-term strategy for creating differentiation and enhancing market competitiveness in the construction sector.

The construction industry in Vietnam not only greatly contributes to GDP but also holds a strategic role in urban and industrial development. With strong human resources, the industry’s growth potential is significant.

For more details on how to join and invest in the construction sector, contact QuangAnhcons at hotline: +84 9 1975 8191.

QuangAnhcons offers comprehensive construction management services, from consulting and design to execution, ensuring quality and timeliness for all projects.