Vietnam Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Vietnam Construction Market is Segmented by Sector(Commercial Construction, Residential Construction, Industrial Construction, Infrastructure (Transportation) Construction, and Energy and Utilities Construction), by Region (Northern Vietnam, Southern Vietnam, and Central Vietnam), and Building construction by process (New Construction, Addition, Alteration). The report offers market size and forecasts for Vietnam Construction Market in value (USD Billion) for all the above segments.

Market Snapshot

Vietnam Construction Market Overview
Study Period: 2017- 2026
Base Year: 2020
CAGR: 8.71 %

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Market Overview

The Vietnam construction market was valued at USD 57.52 billion in 2020 and the market is projected to reach USD 94.93 billion by 2026 registering a growth rate of more than 8.71% during the forecast period (2021 -2026).

The Vietnam construction industry is one of the best performing in Asia-Pacific (APAC) region. Despite losing the momentum due to COVID-19, it has continued to grow strongly in 2020. According to the General Statistics Office (GSO) of Vietnam, construction value-add recorded a growth of 5.7% (year-on-year) in Q3 2020. As a result, the cumulative growth rate for the three quarters was at 5%. In Feb 2021, According to the Vietnam Construction Ministry, the domestic real estate market overcame the most difficult period of the COVID-19 pandemic as a result of positive developments in the market and the overall economy in the fourth quarter of 2020.

The construction sectors account for significant economic growth in Vietnam. The Vietnamese construction industry (VCI) has been growing at an average of 8% over the past 10 years.

It is projected to continue the same growth rate due to the government's efforts to improve the quality of the country's overall infrastructure with investments in infrastructure construction, tourism infrastructure, and housing projects across the country.

The rising domestic consumption and the EU-Vietnam Free Trade Agreement (EVFTA) are driving the retail industry and foreign retailers, especially those from the EU who were expected to enter the country, increasing demand for office space.

In the residential construction market, high-end condos in the city remained in demand despite the pandemic, and there were no signs of a fall in prices.

In housing projects, the Hanoi People's Committee issued a decision approving the outline for devising the capital's housing development program for 2021-2030, with a vision toward 2040.

The increasing demand for warehousing drives investment in Vietnam's logistics system with foreign enterprises' appearance and further business expansion. E-commence and food delivery have now become very crucial in everyday life.

This new trend (E-commence and food delivery) is growing in the neighboring cities of Ho Chi Minh City, such as Binh Duong, Dong Nai, and Long Anthe. The e-commence platform wants to extend its footprint by setting up distribution centers and fulfillment centers, inviting investments from interested domestic and international firms.

Scope of the Report

Construction is an industry that includes the erection, maintenance, and repair of buildings and other immobile structures, and the building of roads and service facilities that become integral parts of structures and are essential to their use. Construction covers the processes involved in delivering buildings, infrastructure and industrial facilities, and associated activities through to the end of their life. Construction includes structural additions and alterations but excludes the building of mobile structures such as trailers and ships. It typically starts with planning, financing, design, execution, builds, and also covers repairs and maintenance, and improvement work. The Vietnam construction market is segmented by sector (commercial construction, residential construction, industrial construction, infrastructure (transportation construction), and energy and utility construction), by region (Northern Vietnam, Southern Vietnam, and Central Vietnam), and building construction by process (New Construction, Addition, Alteration). For each segment, market size and forecasts have been done on the basis of value (USD Billion).

By Sector
Residential
Commercial
Industrial
Infrastructure
Energy and Utilities
By Geography
Northern Vietnam (Hanoi and Other Regions)
Southern Vietnam (Ho Chi Minh City and Other Regions
Central Vietnam (Da Nang and Other Regions)
Building Construction By Process
New Construction
Addition
Alteration

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Key Market Trends

Government plans to develop Infrastructure driving the Construction Market

In Vietnam, the focus of its infrastructure reforms will mostly revolve around the transport and logistics sectors. According to industry experts, there is a growing demand during the forecasted period for more efficient transport networks that could reduce logistics costs.

Vietnam’s Ministry of Transport is working on plans on eight sections of the North-South Expressway project. The eight sections are from Phan Thiet to Dau Giay; Vinh Hao to Phan Thiet; Cam Lam to Vinh Hao; Nha Trang to Cam Lam; Dien Chau to Bai Vot; Nghi Son to Dien Chau; National Highway 45 to Nghi Son; Mai Son to National Highway 45. The work will be completed by 2022. These eight stretches of the North-South Expressway would cost about USD 4.27 billion to build.

Under Vietnam's Railway Development Strategy 2020, the government planned to increase the share of passenger and freight transport through railways from 0.5% of the total passenger transport market share and 1.0% of the total freight transport in 2015 to 13.0% in terms of passenger transport and 14.0% in terms of freight transport by 2020.

The government's focus on developing seaports with an aim to increase trade volume in the country is expected to drive growth in the infrastructure construction market over the forecast period. The government’s focus on developing seaports with an aim to increase trade volume in the country is expected to drive growth in the infrastructure construction market over the forecast period.

Vietnam Construction Market Key Trends

Investments in Residential Sector

The government's effort to bridge the gap between demand and supply for affordable housing in the country is expected to support the market's growth over the forecast period. Strong economic growth has generally led to rising income levels, which in turn has resulted in an increase in demand for higher-end residential real estate, especially in dense urban areas such as Hanoi and Ho Chi Minh City.

The government's effort to bridge the gap between demand and supply for affordable housing in the country is expected to support the market's growth over the forecast period. Accordingly, it launched various social housing programs such as the Housing for Poor Rural Families Program, low-rent housing for industrial zone employees, and low-income urban social housing-local government.

In Aug 2020, a USD 9.3 billion residential and tourism development project has been approved within the buffer zone of the Can Gio Mangrove Biosphere Reserve. The project was proposed by the Can Gio Tourism Urban Area Joint Stock Company, a subsidiary of Vinhomes, the real estate arm of Vingroup, the country’s largest private company. The Can Gio Tourist City would span 2,870 hectares (7,100 acres), largely on land that would be filled in along the South China Sea coast using sand.

The projected completion date for the Vinhomes development is 2031, when planners expect 230,000 people will live there long-term, and about 9 million tourists will come and go annually. In comparison, just over 70,000 people currently live in Can Gio , the largest of Ho Chi Minh City’s 24 districts by area.

Vietnam Construction Sector  2

Competitive Landscape

The Vietnam construction market is highly competitive, with the presence of local and international players. The Vietnam construction market presents opportunities for growth during the forecast period, which is expected to further drive market competition. With a few players holding a significant share, the Vietnami construction market has observable level of consolidation.

Recent Developments

Jan 2021: The Government of Vietnam has announced the start of construction of the USD 16 billion Long Thanh International Airport in Dong Nai province, Vietnam. The airport, which will be located near the economic hub Ho Chi Minh (HCM) City is expected to become an important international airport in the country. The latest move follows approval from the Vietnamese Government for the first phase, which requires an investment of around USD 4.72 billion, of the new airport in November 2020. 

Jan 2021: Vietnam’s new highway works are now being planned. The public investment model will now be used for two stretches of Vietnam’s North-South Expressway project. The National Highway 45-Nghi Son and Nghi Son-Dien Chau sections were previously to have been built under the PPP model. 

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic and Construction Market Scenario in Vietnam

    2. 4.2 Market Overview of Construction Materials in Vietnam

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Technological Innovations in the Construction Sector

    5. 4.5 Impact of Government Regulations and Initiatives on the Industry

    6. 4.6 Comparison of Key Industry Metrics of Vietnam with Other ASEAN Member Countries (Analyst's View)

    7. 4.7 Insights into Industry Value Chain Analysis

    8. 4.8 Comparison of Construction Cost Metrics of Vietnam with Other ASEAN Member Countries (Analyst's View)

    9. 4.9 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Dynamics

    2. 5.2 Market Restraints

    3. 5.3 Market Opportunities

  6. 6. MARKET SEGMENTATION (Market Size By Value)

    1. 6.1 By Sector

      1. 6.1.1 Residential

      2. 6.1.2 Commercial

      3. 6.1.3 Industrial

      4. 6.1.4 Infrastructure

      5. 6.1.5 Energy and Utilities

    2. 6.2 By Geography

      1. 6.2.1 Northern Vietnam (Hanoi and Other Regions)

      2. 6.2.2 Southern Vietnam (Ho Chi Minh City and Other Regions

      3. 6.2.3 Central Vietnam (Da Nang and Other Regions)

    3. 6.3 Building Construction By Process

      1. 6.3.1 New Construction

      2. 6.3.2 Addition

      3. 6.3.3 Alteration

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Overview

    2. 7.2 Company Profiles

      1. 7.2.1 Song Da Corp JSC

      2. 7.2.2 Truong Xuan Investment And Construction JSC

      3. 7.2.3 COFICO

      4. 7.2.4 Hoa Binh Construction Group JSC

      5. 7.2.5 Coteccons Construction JSC

      6. 7.2.6 Visicons Construction and Investment JSC

      7. 7.2.7 Fecon Corp JSC

      8. 7.2.8 Economy Cooperation Corporation One Member Co Ltd

      9. 7.2.9 Ricons Construction Investment Group JSC

      10. 7.2.10 Phuc Hung Holdings JSC

      11. 7.2.11 Delta Corp

      12. 7.2.12 Vincons Vietnam Construction JSC

      13. 7.2.13 ECOBA Vietnam JSC

      14. 7.2.14 Construction Corporation No. 1 JSC

      15. 7.2.15 Newtecons Vietnam

      16. 7.2.16 Hung Thinh Incons JSC

      17. 7.2.17 Choyoda Corp

      18. 7.2.18 CTCI Corp

      19. 7.2.19 Danieli & C. Officine Meccaniche SpA

      20. 7.2.20 GS Engineering and Construction

      21. 7.2.21 Hyundai Engineering & Construction Co. Ltd

      22. 7.2.22 An Phong

      23. 7.2.23 Takco

      24. 7.2.24 Central Cons*

    3. *List Not Exhaustive
  8. 8. MAJOR INFRASTRUCTURE DEVELOPMENT PROJECTS (PROJECT DESCRIPTION, VALUE, LOCATION, SECTOR, AND CONTRACTORS)

    1. 8.1 Existing Infrastructure

    2. 8.2 On-going Projects

    3. 8.3 Upcoming Projects

  9. 9. INVESTMENT ANALYSIS

  10. 10. FUTURE OF THE MARKET

  11. 11. APPENDIX

**Subject to Availability

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Frequently Asked Questions

The Vietnam Construction Market market is studied from 2017 - 2026.

The Vietnam Construction Market is growing at a CAGR of 8.71% over the next 5 years.

The Vietnam Construction Market is valued at 57 Billion USD in 2017.

The Vietnam Construction Market is valued at 94 Billion USD in 2026.

Song Da Corp JSC, COFICO​, Hoa Binh Construction Group JSC ​, Coteccons Construction JSC​, Truong Xuan Investment And Construction JSC are the major companies operating in Vietnam Construction Market.

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