Construction Sector - Industrial, infrastructure projects leading sector recovery
  • 2024-10-18T00:00:00
  • Sector Reports

Construction contributed 6-7% of Vietnam’s GDP in 2013-23, showing high beta characteristics. Vietnam’s construction sector is comprised of three main segments – residential, industrial & commercial, and infrastructure. In 2013-2023, residential construction contributed 41% of the total construction value, followed by industrial & commercial (32%) and infrastructure (27%). 

We expect growth across all segments in the short and long term, though recovery in the residential segment may be slower. We anticipate a gradual uptick in residential construction as the housing market has shown a gradual recovery in primary transactions starting from late 2023. In the long term, the country's robust economy and rapid urbanization should continue to fuel residential construction growth. We expect strong FDI inflows to be the key driver of industrial and commercial construction in both the near and long term. The Government's 2021-2030 infrastructure focus is also expected to boost construction in the near and distant future.

Near-term challenges in Vietnam’s construction sector. While we expect the low-interest rate environment and the new Bidding Law (effective Jan 1, 2024) to benefit the whole construction industry, several short-term challenges remain. These include intense competition, varied movements of construction materials prices, and bad debt pressure for residential contractors. 

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