1. Growth slowed but remained positive and promising
The construction industry started the third year in a row in the deceleration cycle (since 2016), however, the industry growth in 2018 still reached 8.02%, higher than the average GDP growth rate of the whole country. 7.08%.In the short and long term, the construction industry still has many favorable factors, including:
- Population is about 96 million people and the average age is 31, the young population is still dominant. High population leads to high demand for housing and infrastructure construction.
- The middle class (income 7,000-70,000 USD / year) continues to increase rapidly, reaching 81.7% of households in Vietnam. It is expected that this class will grow by 19% in 2019.
- The legal environment continues to improve. Housing Law allows foreign individuals and businesses to own houses in Vietnam and the demand for offices and co-working is growing strongly in big cities.
The latest survey results on the construction industry's production and business trend of the General Department of Statistics show that up to 60.4% of construction businesses of all kinds rated the construction market more stable and convenient from first quarter of 2019. In particular, non-state enterprises forecast the most optimistic market with 59.8% of businesses rated more stable and favorable. State-owned enterprises are 57% and foreign-invested enterprises (FDI enterprises) are 58.9% ...
From that, it can be seen that ignoring some small difficulties due to the step of deceleration after the sudden increase in the period of 2015-2016, in the short term in 2019 and long term, the construction industry is still very bright and A lot of room to continue to grow and break through.
2. Industrial construction will continue to break out compared to other construction sectors
In the field of infrastructure construction, although the demand is still very large, the spending on infrastructure is currently only 50% of the demand, however, the pressure from the budget deficit makes investment. This sector is limited while private investment such as BT, BOT ... has certain shortcomings.
Housing, real estate is on the decline due to credit policy, curbing the state's real estate bubble. This is also an inevitable consequence after the recent massive growth.
The industrial construction industry will be the most prosperous compared to other brothers, which is expected to continue to grow strongly in 2019. Advantages of Vietnam's industrial construction industry to catch the trend of shifting from China to other developing countries is an abundant source of labor, stable and competitive labor and political costs.
3. Competition is getting tougher
Construction can be considered as a manufacturing sector. However, this is a specific manufacturing industry (single production), low input barrier.
If other industries have to invest a lot for factories, warehouses, machinery and technology when starting, the construction industry will not have much demand for factories and warehouses (because it can be used At the construction site, most of the equipment and machinery can be hired. Therefore, the initial investment capital is not too much.
In addition, the construction level and technology of the construction industry is not much different, only different in some leading units and in particular projects such as big houses, large number of basements, bridges large, underground, power plants of all kinds ...
Due to such low input barriers, an engineer or a team after a long period of experience and financial employment can open their own company and compete with their previous companies.
According to statistics at the end of 2017, the number of construction enterprises in Vietnam is about 67,000 units. It is a very large number and continues to increase in 2018 and 2019. The number of businesses increases while the increase in output of the industry does not keep up, which is the cause of fierce competition.
Forecast of competition in bidding will continue "fierce" in this 2019. FPTS report shows that Contractors mainly compete on price and execution ability, these two things relate to their financial capacity and project management capacity.
4. Material prices are forecasted to be stable
Steel prices continue to be favorable due to the supply from China Steel, which is one of the consequences of the ongoing US-China trade war.
Domestic cement prices have not increased since 2012 because the cement industry is very difficult, mainly from the design capacity exceeding 50% of the domestic demand and the policy of restricting export of cement of the Government of Vietnam.
In addition to steel and cement (which account for the largest proportion in construction materials structure, at 60% and 20% respectively), other materials are also forecasted to be stable or not too volatile in 2019.
5. The trend of Design and Build continues to grow
Design and Build, that is, the contractor who has just taken on the design and construction work, has been the preferred and popular method used by most of the major contractors in Vietnam.
Traditional design-bid-build model (design - bidding - construction) with a team of cumbersome consultants who previously had the advantage when the design level and construction level of the Contractor were not high. But after about 20 years of international integration, Vietnamese contractors have quickly acquired advanced technologies and management methods of the world. Receiving a general contractor to design a large construction project is no longer a strange issue. Landmark 81 is the clearest evidence proving the position of Vietnamese Contractor.
Design and Build with outstanding advantages such as saving project implementation time, saving costs, gradually eliminating the conflict between design and construction, project management, shortening construction time to a certain extent will be the sustainable trend of 2019 as well as the future.
Technology / BIM begins to create influence in the construction industry
6. Start the explosion of technology applications in design, construction and project management
2019 is predicted to have a lot of explosion points for the penetration of technology application into design, construction and construction project management.
BIM information models such as Revit, BIM 360, Tekla, Synchro ... are widely used since it has accelerated the design, coordination among disciplines, and helps reduce conflicts. design, limit the risk of construction later.
In construction, although technologies such as AR (augmented reality), VR (virtual reality), 3D printing, Drone monitoring are being used by other countries but it will take a few more years for them to can penetrate Vietnam.
2019 can be a pivotal year marking a major change in the industry about fundamental changes in project implementation, including from design to construction, and operation of the project. Contractors soon change and change and seize new opportunities will take advantage.
By Synthesis source
.jpg)
