Overview of the Construction Industry in Vietnam

The construction industry in Vietnam plays a pivotal role in the economy, closely linked with the social sector and significantly contributing to the country’s development.

Sector Division and Construction Activities in Vietnam

Focus on building structures revolves around housing and non-residential infrastructure, especially due to the increasing demand for affordable housing. Additionally, building materials have rapidly developed, with significant output value, occupying a large share in Vietnam’s GDP. This development propels the construction industry as a critical factor in the economy.

The construction sector in Vietnam is entering a strong growth phase, particularly with increasing activities in road and bridge construction, residential building, and infrastructure development.

Construction Sector Division

Vietnam’s construction industry is divided into three main sectors:

• Road and Bridge Construction: Includes activities from formwork construction, concrete pumping, earth excavation, rebar, and scaffolding. This is a crucial foundation for developing transport infrastructure, supporting construction economic growth.

• Civil Construction: Involves tasks like masonry, roofing, earth excavation, interior finishing, and thermal spraying. This sector mainly focuses on residential projects, which receive significant investment due to the increased housing demand in urban and developing areas.

• Residential Installation: Specializes in installing systems like telecommunication lines, pipelines, and insulation, supporting more efficient and sustainable construction activities.

Construction Activities

Construction activities in Vietnam are driven by the development of significant infrastructure projects, including housing and transportation. Large public and private investments bring the construction industry as a growth driver in the economy with stable construction economic growth prospects.

Development Trends

By 2024, the construction industry is projected to witness significant growth with an expected growth rate of 7.5%. Construction projects promise to transform urban spaces and meet market demands. The period from 2025 to 2028 is also expected to achieve an average annual growth rate of 6.7%. In regions like the Red River Delta and Southeastern Vietnam, the construction sector has been making significant breakthroughs thanks to strong infrastructure development.

Growth of the Construction Industry

The construction industry is predicted to grow by about 7.5% in 2024, driven by transport projects and investments in housing and energy. Forecasts from 2025 to 2028 anticipate average annual growth rates of around 6.7%. These figures indicate that construction is a cornerstone industry for economic development.

Vietnam’s construction sector is entering a new growth phase from 2025, with several positive factors supporting it. This not only motivates Vietnam’s economy but also stimulates strong construction investment opportunities.

Supporting Growth Factors

• Favorable Economic Environment: 2025 is projected as a year when Vietnam’s economy achieves over 8% growth, providing a positive boost for the construction market.
• Legal Reforms: Laws such as the Land Law, Housing Law, and the Real Estate Business Law are being amended, promising to address long-standing issues, thereby boosting construction demand and activities.
• Flexible Investment Mechanisms: According to Resolution No. 171/2024/QH15, the effective use of land has been relaxed, paving the way for a new wave of investment in the industry.

Growth Rate

• Growth Forecast: The construction industry is expected to achieve growth rates from 10.7% to 15% in 2025.
• Growth Base: Over the past decade, from 2013 to 2023, the construction industry has maintained impressive growth momentum with a CAGR of 11% thanks to strong industrialization and urbanization.

Growth Segments

• Infrastructure Construction: Large-scale infrastructure projects are underway, playing a leading role in the industry’s growth.
• Industrial Construction and Residential Real Estate: These two segments will continue the growth momentum from the latter half of 2024 to 2025, bringing positive financial results for businesses.

Challenges and Opportunities

• Challenges: Small businesses face difficulties in recovering capital and confront fierce bidding competition due to the impacts from the previous market phase.
• Opportunities: 2025 is considered a golden opportunity for domestic businesses to rise strongly, capitalizing on favorable conditions and new policy support.

Trends and Challenges of the Construction Industry

The construction industry is evolving with rapid development trends in transportation, renewable energy, and residential building. However, the biggest challenge lies in needing to link and collaborate within the industry value chain to enhance competitiveness and exploit the vast potential of the market.

Vietnam’s Construction Industry faces significant trends and challenges, particularly amid the robust growth of green industrial zones. Targeting 2025-2030, building green industrial zones is becoming a priority, requiring increasingly stringent construction standards. This is a huge opportunity for the Construction Industry as companies invest in new technologies and workforce to ensure sustainable development.

One of the highlights of the Construction Industry is that public investment is predicted to explode in 2025. Strongly supported by legal factors and improved material supply, this could accelerate the industry’s growth rate. Targeting growth from 10.7% to 15% in 2025, the Construction Industry is actively setting the stage for major infrastructure projects.

However, the industry also faces a major challenge regarding materials. Material shortages, particularly in the southern region, are hindering many projects. This requires rapid adaptation in supply chain management within the industry.

Moreover, the strictness of legal building regulations also places a greater responsibility on businesses to meet project management demand and ensure project quality. This is an essential factor to maintain the Construction Industry’s stability and growth amid current volatility.

Finally, green industry development is not only a trend but also a long-term strategy for the Construction Industry to create differentiation and higher competitiveness in the market.

The construction industry in Vietnam not only significantly contributes to GDP but also holds a strategic role in urban and industrial development. With its advantage of high-quality labor, the sector is poised for strong growth.

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

QuangAnhcons offers comprehensive construction management services, from consulting, design to construction, ensuring the quality and schedule of all projects.