“Vietnam’s construction industry is poised for strong growth, with output expected to rise by 8% in 2025 and 7.1% in 2026, driven by surging foreign direct investment, major infrastructure projects in transport and energy, and government initiatives in housing and renewable power. Key challenges include delays in public spending due to land acquisition issues and administrative hurdles, but the sector’s momentum is supported by a pipeline of mega-projects and a focus on sustainable development through 2029.”
Industry Growth Projections
The Vietnamese construction industry is on track for significant expansion, building on a solid foundation from recent years. Output is forecasted to increase substantially in the coming period, reflecting a combination of domestic policy support and international capital inflows. This growth trajectory aligns with broader economic goals, emphasizing infrastructure modernization and energy security.
Historical performance from 2020 to 2024 shows the sector navigating global disruptions while achieving steady gains, with valuations reflecting resilience in core areas like manufacturing support and urban development. Looking ahead, the annual average growth rate is anticipated to stabilize at 6.8% from 2027 to 2029, culminating in a market poised for sustained value addition.
Sector Breakdown and Drivers
| Year | Projected Real Growth (%) | Key Contributing Factors |
|---|---|---|
| 2025 | 8.0 | FDI surge, transport investments, energy plan implementations |
| 2026 | 7.1 | Continued infrastructure push, housing developments, nuclear initiatives |
| 2027-2029 | 6.8 (average) | Hydrogen production targets, railway expansions, urban housing mandates |
Breaking down the industry by key sectors reveals targeted growth areas, each bolstered by specific drivers and investments.
Infrastructure Sector
Infrastructure remains a cornerstone of Vietnam’s construction boom, with heavy emphasis on transportation networks. The government has committed to accelerating nine major railway lines before 2030, representing a massive investment aimed at enhancing national connectivity. Road and airport upgrades are also prioritized, addressing bottlenecks in logistics and trade facilitation. These projects are expected to drive significant output in civil engineering and heavy construction, contributing to overall sector momentum.
Energy and Utilities Sector
The energy segment is experiencing a transformative phase, guided by the revised Power Development Plan VIII (PDP8), approved in mid-2025. This plan outlines ambitious targets for renewable sources: 73,416 MW of solar power, 38,029 MW of onshore wind, and 6,000 MW of offshore wind by 2030, with offshore capacity expanding beyond 17,000 MW by 2035. Additionally, the reintroduction of nuclear energy marks a pivotal shift, with the Ninh Thuan 1 and 2 plants slated for operations between 2030 and 2035, each with capacities ranging from 2,000 to 3,200 MW.
A notable milestone was the September 2025 memorandum of understanding between Rosatom Energy International and Power Engineering Consulting JSC 2 for the Ninh Thuan 1 project, signaling international collaboration in nuclear development. Parallel to this, the Ministry of Industry and Trade’s strategy targets 20 million tons of annual hydrogen production by 2050, fostering investments in clean energy infrastructure and utilities upgrades.
Industrial Sector
Industrial construction is fueled by Vietnam’s appeal as a manufacturing hub, attracting foreign investors seeking diversified supply chains. Facilities for electronics, automobiles, and textiles are expanding rapidly, supported by industrial park developments in key economic zones. This sector’s growth is closely tied to export-oriented industries, with construction activity ramping up to accommodate new factories and logistics centers.
Residential Sector
Residential building is gaining traction through government-backed affordable housing programs and urban expansion initiatives. Demand is driven by population growth and rising middle-class aspirations, leading to increased construction of apartments, townhouses, and social housing units. Private sector involvement is rising, with developers focusing on sustainable and smart home features to meet evolving consumer preferences.
Commercial and Institutional Sectors
Commercial construction encompasses office spaces, retail centers, and hospitality projects, benefiting from tourism recovery and business expansions. Institutional developments, including schools and healthcare facilities, are supported by public budgets to improve social services. These sectors are projected to grow in tandem with economic recovery, though at a moderated pace compared to infrastructure and energy.
Foreign Direct Investment and Budget Support
A critical enabler of this growth is the influx of foreign direct investment, which totaled $31.5 billion in registered capital for the first ten months of 2025, marking a 15.6% increase from the previous year. This capital is channeling into high-impact projects across sectors, enhancing technological capabilities and job creation.
Complementing this, the 2026 state budget allocates approximately $126.2 billion in total expenditure, with revenue projections at $98.6 billion. These funds prioritize infrastructure and energy, ensuring a steady flow of resources for construction activities. Public-private partnerships are increasingly utilized to bridge funding gaps and accelerate project timelines.
Challenges and Risks
Despite the optimistic outlook, the industry faces hurdles that could temper growth. Public investment disbursements have been slowed by site preparation delays, complex land pricing due to historical ownership disputes, and shifts in government administration. Regulatory changes pose additional risks, potentially affecting project approvals and timelines.
Supply chain vulnerabilities, material cost fluctuations, and labor shortages in skilled trades are ongoing concerns. Moreover, external factors like global trade tensions could impact FDI flows and export-driven industrial projects. Addressing these through streamlined permitting and enhanced workforce training will be essential for maintaining momentum.
Competitive Landscape
The market features a mix of domestic giants and international players, with leading contractors including Coteccons Construction JSC, Hoa Binh Construction Group JSC, and Song Da Corp JSC dominating major bids. Consultants like Power Engineering Consulting JSC play pivotal roles in specialized projects. Competition is intensifying, with firms leveraging technology for efficiency gains and sustainability compliance.
The project pipeline is robust, with mega-initiatives in various stages of development. Analytics indicate strong momentum in energy and transport, where spending is concentrated. Opportunities abound for firms adept at navigating regulatory landscapes and forming strategic alliances.
Key Projects and Initiatives
Several flagship projects underscore the sector’s direction. The Ninh Thuan nuclear developments represent a leap in energy diversification, while railway expansions aim to revolutionize domestic transport. Solar and wind farms under PDP8 are scaling up rapidly, with offshore wind poised for exponential growth post-2030.
Housing mandates target millions of units, integrating green building standards. Industrial parks in provinces like Binh Duong and Dong Nai are expanding to host FDI-backed manufacturing. These initiatives not only boost construction output but also contribute to long-term economic resilience.
Market Valuation and Economic Impact
Valuations for the industry highlight its escalating importance. In nominal terms, the sector’s contribution to GDP is substantial, with 2025 figures reflecting over 9% growth in construction activities alone. This translates to broader economic benefits, including employment for millions and stimulus for related industries like materials and engineering.
Forecasts through 2029 project cumulative growth that positions Vietnam as a regional leader in construction sophistication, with emphasis on digital integration and eco-friendly practices.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendations, or endorsements of any specific strategies. Readers should conduct their own research and consult professionals before making decisions based on this content.