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The construction sector to robust in the coming years

Monday 07, 10 2019
The stable growth of the economic development, the sharp increase of the FDI over the years
The construction sector to robust in the coming years

... are factors that help the basic construction industry in Vietnam to flourish, and are expected to continue to robust in the following years.

According to statistics, the basic construction industry is recording a very strong growth of 25% compared to the same period last year.

The factors that bring growth to the infrastructure construction industry in Vietnam are that in 2019 the macroeconomic base will continue to be stable and the CPI will continue to remain low. The total value of FDI continues to increase strongly, especially due to the effects that the US-China trade war partly had on the FDI inflows from China to Vietnam recently.

The construction sector to robust in the coming years

Many fields attract strong capital inflows such as the fields of processing, manufacturing, real estate business, electricity, and water, accommodation, and construction.

In the first 9 months, the total value of contributed FDI capital to buy shares also increased sharply. Realized FDI capital was estimated at 11.96 billion USD, up 6.3% over the same period last year. Foreign investors' purchase of shares is US $ 9.5 billion, up 80% compared to the same period in 2018.

The construction sector to robust in the coming years 2

In addition, Hong Kong and South Korea surpassed Japan and China and became the regions with the largest total FDI in Vietnam.

According to experts, Vietnam is attracting more foreign investors than ever thanks to tax incentives and low labor costs. The Government of Vietnam also prioritizes public investment in infrastructure, high-speed construction projects, elevated roads, bridges, oil refineries, and industrial parks.

Multinational companies, large corporations from China are strongly promoting the production shift to Vietnam instead of China. This will help promote industrial construction and create favorable conditions for contractors in this field. The field of infrastructure construction is also attracting great attention of the Government and both domestic and foreign investors.

According to the General Statistics Office, in the third quarter of 2019, 22.7% of construction enterprises assessed the situation of production and business better, 40.9% of businesses said that it was stable and 36.4% % of businesses said that it was more difficult.

The construction sector to robust in the coming years 4

In the first 9 months of 2019, many construction enterprises and large contractors listed on the stock exchanges such as Coteccons (CTD) and Hoa Binh (HBC), FECON Joint Stock Company (FCN), LICOGI 14 Joint Stock Company (L14), JSC LICOGI 16 (LCG) ... also recorded an increasing proportion of the industrial construction segment in the revenue structure. These companies have good growth in production and business activities and have great development potential in the period of 2020-2022.

More specifically, recently the Ministry of Transport has issued a decision to cancel the prequalification in the form of open international bidding and adjust the invitation for prequalification in accordance with the form of widely bidding in the country, selecting investors to carry out 8 PPP projects under the North-South Eastern Expressway Project.

In the context that Vietnam increased public investment to develop infrastructure, combining bidding to use domestic contractors, Vietnam's leading construction and construction consultants will most likely benefit.

Potential of Vietnam Construction Industry

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