BMI View : The positive outlook for Vietnam's construction sector is supported by strong economic growth and regulatory changes. We expect residential and non-residential building segment to outperform in the long term, as real estate and manufacturing sectors will continue to benefit from increased foreign investment.
Latest Updates And Structural Trends
Our Country Risk (CR) team maintain their forecast for Vietnam's real GDP growth to come in at 6.6% in 2016 (from 6.7% in 2015), which would make Vietnam one of the fastest growing economies in Asia. In turn, our outlook for Vietnam's construction industry remains positive and we forecast real growth of 5.9% and 6.3% in 2016 and 2017 respectively.
Vietnam's transport sector has great potential and will remain a key focus of the country in 2016. In the long term, we expect the residential and non-residential building industry to outperform between 2017 and 2025. The sector will grow at an annual average rate of 6.6% during this period due to sustained urbanisation, rapid industrialisation, growing tourism sector and measures to reduce restrictions on foreign ownership of property.
We believe consistent fiscal deficits in Vietnam as a result of a lack of spending prudence could undermine much needed infrastructure development and remain a blemish on the strong economic growth.
|e/f = BMI estimate/forecast. Source: Vietnam General Statistics Office, BMI|
|Construction industry value, VNDbn||215,873.39||232,993.45||259,029.04||287,501.51||318,830.25||353,458.93||391,414.87|
|Construction Industry Value, Real Growth, % y-o-y||2.06||5.88||6.27||6.09||6.10||6.06||6.04|
|Construction Industry Value, % of GDP||5.1||5.1||5.1||5.0||5.0||5.0||5.0|
Vietnam ranks in 13th position, out of 21 countries. This is largely owing to the high business risks due to corruption and significant potential for delays to project development.
The country's overall score rose to 55.7 out of 100 from 54.2 in the previous quarter. Vietnam achieves a high score for the level of policy continuity and sector growth.
Positive policy formation in terms of public private partnership regulations, investment laws and foreign ownership restrictions on property also support our increasingly positive outlook.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Vietnam Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Vietnam Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Vietnamese infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Vietnam to test other views - a key input for successful budgetary and planning in the Vietnamese infrastructure market.
- Target business opportunities and risks in the Vietnamese infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Vietnam.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.