Industry Report

Construction and Steel sector – Sustaining growth amid challenges

Posted: Jul 23, 2026

Construction outlook for 2H2026:

The construction sector is expected to be a key driver of GDP growth in 2026, with projected growth of 14% YoY, supported by residential construction and public investment. Real estate supply is expected to remain robust, while 2026 marks a pivotal year in the 2026–2030 mediumterm public investment cycle. Social housing supply is projected to increase by 50% YoY, and accelerated railway infrastructure projects, including the Hanoi–Hai Phong–Lao Cai railway and Ben Thanh–Can Gio line, are expected to support a 12% YoY increase in public investment disbursement.
We favor CTD and CII within the construction sector due to:
- Leading industry positions with significant upside from the sector’s positive growth outlook. Backlog is projected to grow by 24% and 18% YoY, driven by stronger collaboration with major developers. In addition, net profit is expected to increase in 2026, supported by contributions from construction and real estate segments.

Steel sector outlook for 2026:

The steel sector is expected to record positive growth in 2026, supported by resilient domestic demand despite continued export headwinds. Domestic steel consumption is projected to increase by 13%/10% YoY, driven by sustained real estate supply and a projected 12% YoY improvement in public investment disbursement.
We favor HPG within the steel sector due to:
- HPG is well positioned to benefit from its leading domestic market share, enabling the company to capitalize on resilient domestic demand, reduced competition from Chinese steel, and recovering gross margins. As a result, HPG’s net profit is expected to record strong growth in 2026.

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