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Construction in Vietnam - Key Trends and Opportunities to 2024

November 2020 | 43 pages | ID: CA97EB308B6EN
GlobalData

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Construction in Vietnam - Key Trends and Opportunities to 2024

SUMMARY

The Vietnam construction industry was growing at a relative fast pace prior to the Coronavirus (COVID-19) crisis, with the industry expanding by 9.1% in real terms in 2019. Growth had been driven by investments on the national strategic projects, mainly in the transport infrastructure sector. However, the imposition of Large-Scale Social Restrictions (PSBB) by the government to contain the spread of COVID-19, along with global trade and travel disruptions which affected the availability of manpower and raw materials, weighed on growth in Vietnam’s construction industry in the first half of 2020. Consequently, GlobalData expects the industry’s growth to decelerate to 5.5% in real terms this year, which is a relatively strong performance compared to other markets in the region.
According to the General Statistics Office (GSO), the construction industry’s value-add grew by 5.7% year on year (YoY) in real terms in the third quarter of 2020 (the latest data available at the time of writing), improving from 4.7% and 4.4% in the previous two quarters, respectively. In the coming quarters, the construction industry’s output growth will continue to pick up, supported by investments in transport and energy infrastructure.
Efforts to attract foreign investment through the public private partnerships (PPP) model will support the construction industry over the forecast period. In June 2020, the national assembly adopted the law on PPP investment, which is aimed at regulating investment activities and attracting private investment under the PPP model. The government’s efforts to balance supply and demand for affordable housing will also generate momentum in the residential sector. Ongoing urbanization will continue to generate demand for residential and infrastructure development.
This report provides detailed market analysis, information and insights into Vietnam’s construction industry, including -
  • Vietnam’s construction industry's growth prospects by market, project type and construction activity
  • Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Vietnam’s construction industry
  • Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
SCOPE

This report provides a comprehensive analysis of the construction industry in Vietnam. It provides -
  • Historical (2015-2019) and forecast (2020-2024) valuations of the construction industry in Vietnam, featuring details of key growth drivers.
  • Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
  • Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
  • Listings of major projects, in addition to details of leading contractors and consultants
REASONS TO BUY
  • Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
  • Assess market growth potential at a micro-level with over 600 time-series data forecasts.
  • Understand the latest industry and market trends.
  • Formulate and validate strategy using GlobalData's critical and actionable insight.
  • Assess business risks, including cost, regulatory and competitive pressures.
  • Evaluate competitive risk and success factors.
1 EXECUTIVE SUMMARY

2 CONSTRUCTION INDUSTRY: AT-A-GLANCE

3 CONTEXT

3.1 Economic Performance
3.2 Political Environment and Policy
3.3 Demographics
3.4 COVID-19 Status

4 CONSTRUCTION OUTLOOK

4.1 All Construction
4.2 Commercial Construction
4.3 Industrial Construction
4.4 Infrastructure Construction
4.5 Energy and Utilities Construction
4.6 Institutional Construction
4.7 Residential Construction

5 KEY INDUSTRY PARTICIPANTS

5.1 Contractors
5.2 Consultants

6 CONSTRUCTION MARKET DATA

7 APPENDIX

7.1 What is this Report About?
7.2 Definitions
7.3 GlobalData Construction

LIST OF TABLES

Table 1: Construction Industry Key Data
Table 2: Vietnam, Key Economic Indicators
Table 3: Vietnam, Commercial Construction Output by Project Type (Real % Change), 2015-2024
Table 4: Vietnam, Top Commercial Construction Projects by Value
Table 5: Vietnam, Industrial Construction Output by Project Type (Real % Change), 2015-2024
Table 6: Vietnam, Top Industrial Construction Projects by Value
Table 7: Vietnam, Infrastructure Construction Output by Project Type (Real % Change), 2015-2024
Table 8: Vietnam, Top Infrastructure Construction Projects by Value
Table 9: Vietnam, Energy and Utilities Construction Output by Project Type (Real % Change), 2015-2024
Table 10: Vietnam, Top Energy and Utilities Construction Projects by Value
Table 11: Vietnam, Institutional Construction Output by Project Type (Real % Change), 2015-2024
Table 12: Vietnam, Top Institutional Construction Projects by Value
Table 13: Vietnam, Residential Construction Output by Project Type (Real % Change), 2015-2024
Table 14: Vietnam, Top Residential Construction Projects by Value
Table 15: Vietnam, Key Contractors
Table 16: Vietnam, Key Consultants
Table 17: Vietnam, Construction Output Value (Real, US$ Million)
Table 18: Vietnam, Construction Output Value (Nominal, VND trillion)
Table 19: GlobalData Construction Market Definitions

The Vietnamese construction industry recorded a CAGR of 19.00% between 2008 and 2012 to value VND699.5 trillion (US$33.6 billion). However, Vietnam’s economy has undergone an extended period of insubstantial expansion, due to decelerated growth in the real estate sector, a banking system characterized by non-performing loans (NPLs) and a property market slump. This is reflected in the construction industry’s growth which slowed from 19.7% in 2011 to 6.5% in 2012.

Based on the assumption that the banking sector avoids a crisis and the government manages to rebuild growth momentum with carefully targeted stimulus measures and investment in large scale infrastructure development projects, outlook for the industry is positive The Vietnamese construction industry is expected to record a CAGR of 11.96% over the next five years and value VND1231 trillion (US$59.1 billion) in 2017.

Infrastructure construction was the largest construction market in Vietnam in 2012, valuing VND385.5 trillion (US$13.7 billion). The market recorded a CAGR of 22.01% between 2008 and 2012. Rising in transportation costs, delays in the transport of goods and services and limited access to a large domestic rural market are reducing industry competitiveness and undermining economic growth. The government has announced transport, road and energy infrastructure projects. Energy in particular is set to receive substantial government funding under the Power Master Plan-7.

The residential construction market in Vietnam valued VND276.9 trillion (US$13.3 billion) in 2012. A property slump following the global financial crisis and a banking system struggling with an increasing share of non-performing loans (NPLs) has lead to a situation of rising real estate inventory, falling property prices and many large residential construction projects being put on hold due to difficulties in obtaining credit. The residential construction market is projected to record a CAGR of 11.58% over the next 5 years and value VND478.8 trillion (US$23.0 billion) in 2017.



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