The construction industry enjoyed strong growth last year and is expected to maintain the momentum this year too, experts have said.
Speaking at a seminar on the development potential of the Vietnamese construction industry in 2018 held in HCM City on January 2, economist Dinh The Hien said the industry’s high growth rate in the past 10 years -- with its revenues going up from US$1.2 billion in 2007 to nearly $13 billion last year - had been supported by economic recovery, the Government’s investment in infrastructure and housing, and the liberal issuance of building permits.
Last year the real estate sector had the largest number of new businesses followed by the construction sector.
Among listed companies, construction companies had among the highest growth rates in terms of revenues and profits in 2015-17, Hien said.
The strong FDI flows and mergers and acquisitions deals in the real estate sector at the end of 2017 would push up demand for infrastructure and construction of housing and factories, which would give the construction industry a boost this year, he said.
Bui Quang Tin, CEO of Bizlight Business School, said according to the Ministry of Transport, Viet Nam needs $48 billion for infrastructure development in the next five years.
The strong recovery by the property sector in recent years has meant construction companies have their order books always full, he said.
“Previously, domestic construction companies had worked for foreign contractors, but now we dominate the construction market.”
Some companies like Hoa Binh Corporation have even bidden for foreign construction projects as engineering, procurement and construction (EPC) contractor, he said.
Nguyen Van Hiep, former director of the HCM City Department of Construction, said the country’s construction companies now have advanced engineering and construction know-how.
He urged them to expand their operations abroad, warning that if one day the domestic property market slumps, the construction industry would "die".
The Government should have policies to encourage construction firms to go abroad, he added.
Le Viet Hai, vice chairman of the Viet Nam Association of Construction Contractors, said the revenue of global construction industry reached an estimated $11 trillion last year.
If local builders go abroad to work and earn 1 per cent of this amount, that would be worth billions of dollars, he pointed out.
There is a huge opportunity for the firms to go abroad because the construction cost in other countries is around $2,000 per square metre, but it is only $500-$1,200 in Viet Nam, he said.
In addition, Vietnamese firms are no less competent than their foreign counterparts in the construction of high-rise buildings and have gain great trust among foreign investors, he said.
For instance, Hoa Binh Corporation has won two bid packages in Kuwait and also been contracted for construction in Malaysia and Myanmar, he said.
Hai said the association has submitted a proposal to turn the export of construction services into a key economic sector.
It is necessary to go abroad when local enterprises are qualified to do so, he added. — VNS