Vietnam Construction Sector Grows by 7.48% in First Nine Months of 2024

October 11, 2024 Posted by Vietnam Briefing Reading Time: 2 minutes

The construction sector in Vietnam has shown significant growth during the first nine months of 2024, registering a 7.48 percent increase compared to the same period in 2023. This expansion underscores the resilience of the industry despite the broader challenges faced by construction enterprises. The Ministry of Construction recently reviewed its performance for the year so far, emphasizing key achievements and setting out priorities for the final quarter.

Progress in housing development and construction regulations

A key performance indicator is the rise in the average housing floor area per capita, which has increased to 26.5 square meters, up 0.9 square meters from last year. This marks a steady improvement in Vietnam’s housing infrastructure, reflecting the sector’s ability to meet growing demand.

Minister of Construction Nguyễn Thanh Nghị noted that the Vietnam construction sector had largely met its major goals for the year, including the development of social housing, further improvements to the legal framework, and ensuring transparency in construction material pricing.

Local authorities now regularly announce monthly and quarterly construction material prices, which has helped maintain quality standards across projects and enabled better planning for contractors and developers.

Legislative focus and strategic development

For the remaining three months of 2024, the Ministry has identified key legislative efforts as critical for continuing sector development. Two areas of focus will be the Law on Urban and Rural Planning and the Law on Urban Development Management, both of which are seen as essential for guiding the future growth of Vietnam’s construction industry. These laws will play a pivotal role in modernizing infrastructure, improving urban planning, and addressing the long-term needs of both rural and urban regions.

Identify the Optimal Investment Destination with Cross Country Competitiveness Benchmarking ⟶

Additionally, the Department of Housing and Real Estate Market Management has been tasked with working closely with the Legal Department to assist local authorities in implementing the Law on Housing and the Law on Real Estate Business. The Ministry is pushing for a comprehensive approach to resolve issues in real estate projects and advance social housing initiatives, ensuring policies cater to citizens who have made significant contributions to the country.

Challenges and industry outlook

Despite these positive developments, the construction sector in Vietnam has faced significant hurdles throughout 2024, particularly in construction and building material production. Leading enterprises, such as the Việt Nam National Cement Corporation (VICEM), have highlighted the need for restructuring and are seeking government support to lower clinker taxes and expedite mineral extraction permits.

Learn about our Location Analysis and Site Selection services ⟶

Meanwhile, the Việt Nam Machinery Installation Corporation (LILAMA), despite surpassing its revenue targets for the first nine months, has forecast difficulties ahead, particularly in securing new projects and contracts for 2025. LILAMA is currently negotiating with international partners, such as Thyssenkrupp Nucera, to manufacture electrolysis modules for green hydrogen production projects. However, the company is also facing challenges related to state capital divestment and has requested assistance from the Ministry of Construction to navigate these obstacles.

Conclusion

While 2024 has presented challenges for Vietnam’s construction sector, it has shown remarkable resilience and growth. As the country continues to develop its infrastructure, the construction sector remains central to economic progress. With further legislative advancements and strategic focus, Vietnam is well-positioned to continue expanding its housing and real estate market, while also addressing key challenges faced by businesses and investors. The Ministry of Construction’s ongoing support and efforts to refine regulatory frameworks will be crucial.

About Us

Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Asia, including ASEAN, China, and India. For editorial matters, contact us here and for a complimentary subscription to our products, please click here. For assistance with investments into Vietnam, please contact us at vietnam@dezshira.com or visit us at www.dezshira.com.

Dezan Shira & Associates assists foreign investors throughout Asia from offices across the world, including in Hanoi, Ho Chi Minh City, and Da Nang. We also maintain offices or have alliance partners assisting foreign investors in China, Hong Kong SAR, Dubai (UAE), Indonesia, Singapore, Philippines, Malaysia, Thailand, Bangladesh, Italy, Germany, the United States, and Australia.