Special Report: Latest Developments in Laos' Construction Industry

Chinese, Thai and Vietnamese enterprises are the core participants in local engineering construction

(LAOS) From 2024 to 2025, Laos' construction sector maintained steady expansion. The construction-related GDP rose from 16.813 billion kip in 2023 to 17.675 billion kip in 2024, with an overall two-year growth rate of around ‌4.7%‌, accounting for about 31% of the national GDP, making it a core pillar driving infrastructure upgrading.

Currently, Laos' construction market is in a period of rapid development to shore up infrastructure weaknesses, with concentrated demand in three major directions: highway network upgrading, public hydropower supporting facilities, and airport system renovation. Chinese, Thai and Vietnamese enterprises are the core participants in local engineering construction.

Over the next five years, Laos' construction industry will advance along the two main lines of interconnection and green transformation. The average annual compound growth rate is expected to remain above ‌4%‌, with the focus shifting to cross-regional transportation projects, new energy infrastructure, and urban-rural public facility renewal, while promoting the alignment of engineering quality standards with regional norms. The Memorandum of Understanding on China-Laos Engineering Quality Inspection Cooperation signed in September 2026 will provide systematic support for the whole industry, including technical training, joint laboratory construction, and quality control of major projects, further bridging the standard gaps in the local construction sector.

Three landmark ongoing and advancing major projects in Laos are progressing as follows:

As the largest single wind power project in Southeast Asia and the first cross-border power transmission new energy project in Asia, most of the wind turbines have been hoisted. After operation, the annual power generation will reach 1.72 billion kWh, and the green power will be directly transmitted to Vietnam, helping Laos convert its resource advantages into cross-border economic benefits.

Based on the completed "one reservoir with seven cascades" hydropower project, the current focus is on upgrading roads and bridges around the reservoir area and improving public supporting facilities in resettlement sites. The cumulative power generation of the project has exceeded 22.5 billion kWh, continuously supporting Laos' strategy of becoming the "Battery of Southeast Asia".

The project adopts the public-private partnership model to promote terminal expansion and airfield area upgrading. After completion, it will greatly improve the reception capacity of the aviation hub in northern Laos, and further drive the development of the cultural tourism industry and regional commercial circulation.

On the whole, Laos' construction market is gradually extending from traditional road and bridge hydropower construction to high-end infrastructure such as green energy and cross-border interconnection, and will release more new space for regional building material exports and engineering technical cooperation in the future.

(Reported by BuildMartASEAN)